The Impact of Government Policy’s Effect on Foreign Direct Investment in
United Arab of Emirates

Abstract

The objective of this study is to assess the impact of governmental policy changes in the United Arab Emirates (UAE) on both inward and outward foreign direct investment (FDI) by utilizing a statistical model framework. This research contributes to the existing body of knowledge focused on the influence of public policies targeting FDI and establishes a specific connection between these policies and outward direct investment (ODI). We particularly examine the consequences of major policy adjustments concerning FDI that were implemented by the UAE government over the period from 1950 to 1995. Our analysis indicates that the UAE’s participation in various trade agreements notably enhanced both inward and outward foreign direct investment. However, the UAE’s initiatives to regulate FDI through specific agencies had minimal significant effects on either FDI or ODI.