Did Foreign Direct Investment contribute to the Libyan Economic Growth in Transition Period?

Abstract

Despite the large body of research about the impact of FDI on economic growth; the results have been elusive. Whereas, research shows positive impact on some countries; some research illustrates negative effect in other countries. Accordingly, this paper aims to examine the FDI’s impact on the Libyan economy in the transition period 1990-2010. Also, the study compares the FDI performance in Libya and some countries in transition. I used many sorts of analyses such as: time-series analysis, correlation and regression analysis, to find out the impact of FDI on Libyan economy, and how the Libyan transitional economy followed the trajectory of other transitional economies in terms of FDI, and in what ways has it differed from other transitional economies. The research illustrates that the impact of FDI on Libyan economy was weak in transition period. Also, the comparison between Libyan FDI performance and some countries in transition shows dissimilarity in terms of FDI performance index. Furthermore, the study shows that the relationship between FDI annual change and GDP annual change in Libya was negative.

DOI: 10.5901/mjss.2013.v4n9p46