The impact of macroeconomic instability on FDI flows Study of a sample of States for the period (1980-2016)

Abstract

Most Countries, whether developed or developing, are making great efforts to attract foreign investments, achieve the maximum possible benefit, and strengthen the forward and backward linkages of theses investment, in such a way as to raise the levels of infrastructure and superstructureto avoid any factors to refrain from the flow of these investment. The most important of these factors is that it includes the package of macroeconomic and economic variables, and not only that these carefully selected variables are not random variables, but are variables with a sustainable effect, and sometimes chronically. The most important of which is that fluctuations in the exchange rate and inflation have a negative impact on FDI flows. Increased exchange rate fluctuations meant increased risk, which reduced FDI flows to Countries with excessive exchange rate fluctuations.