DOI: 10.11118/ecos2026_042

FOREIGN DIRECT INVESTMENT, OIL REVENUES, AND TRADE AS DETERMINANTS OF ECONOMIC GROWTH IN GCC COUNTRIES

Evans Yeboah¹

¹ Department of Statistics and Operation Analysis, Faculty of Business and Economics, Mendel University in Brno, Zemědělská 1, 613 00 Brno, Czech Republic

This study investigates the roles of foreign direct investment (FDI), oil revenues, and trade in shaping economic growth in Gulf Cooperation Council (GCC) countries over the period 1995–2024. The analysis employs the pooled mean group autoregressive distributed lag (PMG-ARDL) model to capture both long-run and short-run dynamics, and uses fully modified ordinary least squares (FMOLS) for robustness. The results indicate that FDI and oil rents exert positive, statistically significant effects on long-run per capita income. In contrast, merchandise trade does not exhibit a significant contribution to growth. The short-run estimates confirm the presence of a stable adjustment mechanism toward the long-run equilibrium. These findings highlight the dominant role of resource revenues and external capital inflows in the GCC growth process and point to the need for policies that promote diversification and strengthen non-oil sectors.

Keywords: FDI, merchandise trade, oil rents, economic growth

pages: 387-395, online: 2026