Impact of determinants on foreign direct investment in Saudi Arabia: A multiple linear regression analysis

Attracting foreign direct investment (FDI) is crucial globally, especially in developing economies. FDI brings in capital, boosts production, enhances infrastructure, generates employment, and fosters economic growth. This becomes particularly significant for Saudi Arabia in light of its Vision 2030 plan, which aims to elevate FDI to 5.7% of its GDP by 2030 (equivalent to $100 billion annually). This study delves into the primary factors influencing FDI in Saudi Arabia. Analyzing data from 2005 to 2021, we explore the effects of various factors, including market size, economic growth, inflation, income levels, export performance, trade openness, corruption levels, and government spending. Using multiple linear regression (MLR), we analyze these factors' impact on FDI. Our findings reveal four significant determinants. Market size, inflation rate, and trade openness positively influence FDI inflows, while GDP per capita (income) has a negative impact. Other variables studied did not show significant effects. These results can inform policymakers in formulating strategies to attract more foreign investment. (c) 2024 The Authors. Published by IASE. This is an open access article under the CC BY -NC -ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).