The impact of foreign direct investment on Saudi Arabia

摘要

This paper investigates the impacts of foreign direct investment on Saudi Arabia. This examination seeks to find the degree to which foreign firms benefit Saudi Arabia and their impact on other aspects such as language and culture. In addition, the study went further to review the influence of foreign firms on the FDI inflows in the country, the examination of the determinants of FDI in comparison to other developing countries, and to see how Saudi Arabia???s heavy dependence on oil revenue affects the nation???s FDI. Foreign direct investment is a crucial discussion term in the paper as it is a very important resource when it comes to economic development. This is because it cuts the gap between domestic mobilized savings and desired investments. Furthermore, FDI facilitates tax revenues of the host country, improves technological knowhow, and labor skills. Thus, a country such as Saudi Arabia with ample natural resources in terms of oil and numerous foreign workers is better placed to take advantage of such benefits. Also, the paper touches on Turkey???s FDI that is propelled by the country???s political stability as well as the foreign-friendly and accommodative culture that has contributed positively in facilitating an investor friendly environment. Turkey was used to demonstrate comparison with Saudi Arabia in terms of FDI and other economic aspects. Despite the favorable factors, it is worth mentioning that the Turkish economy was negatively influenced by the euro crisis of 2012, but thereafter, started to improve again. All in all, FDI contributes a large amount of the Saudi Arabia???s economy and foreign firms have a significant impact on the general Gross Domestic Product as they contribute a massive 34 % of the total GDP.udKey Words: FDI, Exports, Imports