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The paper aims to examine the relationship, whether complementary or substitutive, between inward FDI and gross domestic investment in the six GCC countries using cointegration techniques and fully modified GMM estimation. Based on the panel data, the empirical evidence implies that in Qatar, Oman, the UAE and Saudi Arabia, the inward FDI has positive short-run and long-run effects on the domestic investment. For Bahrain, such a complementary relationship exists only in the short-run. For the majority of GCC countries, the long-run elasticities have large magnitude compared to the short-run counterparts, justifying more attraction policy of the IFDI in the future. The gap in the privatization process of public enterprises in the GCC explains in a large extent their heterogeneity in terms of elasticities and spillovers effects.

This study investigates the return spillovers and volatility spillovers from developed markets (e.g., Europe, Japan and the US) into the financial markets of selected emerging countries in Asia and the Middle East and North Africa (MENA) region. Based on constant and trend spillover models, we find evidence of significant spillover effects from developed markets to emerging markets. The results from variance ratios indicate the dominance of US shocks across all emerging markets, though the effect varies widely among countries. New to these literature, we conduct an empirical analysis quantifying the underlying determinants affecting the extent of shock spillovers. The results show that bilateral factors such as trade volume, portfolio investment and distance are significant in explaining the spillover effects.

Capital market liberalization allows the access of foreign investors to Saudi stock market especially since 2005. The test of adaptation to the market volatility exhibits the existence of the volatility clustering in the daily return and volume of traded shares. This finding is corroborated by the absence of variance homoscedasticity using BF test. Also, the results indicate that the period between 11.2002 and 01.2006 is more efficient comparatively to other periods. Furthermore, from the start of 2010, there is a relative stability in stock market. The shocks on volatility market are persistent, but their intensity and permanence after the initial liberalization and institutional reforms of the capital market appear to be less in the volume, but more expanded in the prices.

The research aims to examine the relationship, whether complementary or substitutive, between inward FDI and gross domestic investment in the six GCC countries using cointegration techniques and fully modified GMM estimation. Based on the panel data during the period 1979-2010, the empirical evidence implies that in Qatar, Oman, the UAE and Saudi Arabia, the inward FDI has positive short-run and long-run effects on the domestic investment. For Bahrain, such a complementary relationship exists only in the short-run. For the majority of GCC countries, the long-run elasticities have large magnitude compared to the short-run counterparts, justifying more attraction policy of the IFDI in the future. The gap in the privatization process of public enterprises in the GCC explains in a large extent their heterogeneity in terms of elasticities and spillovers effects.

The results of return equation exhibit the existence of a positive relationship between return and risk, which indicates the high risk and explains the dynamics of shareholders behavior, especially on Saturday and Tuesday, where utmost important information is excreted. The findings highlight that the period of openness to domestic and foreign capital is characterized by more important flow of information. Also the share prices have a memory, especially in the first sub-period, while during the second sub-period this memory is weaker. Furthermore, it is proved that the access of foreign investors could reduce the return volatility of TASI. From the EGARCH-M models, it is reflected through the leverage effect that negative shocks increase the volatility more than positive shocks. The CGARCH-M results show through the volatility persistence rate and decay rate that short-run volatilities perpetuates less than long-run volatilities. It turns out that the liberalization to foreign investment leads to reduce significantly the volatility mostly in the short term, while the foreign presence has not managed so far to reduce the volatility in the long run. Also it is revealed during the 2006 crisis, that the extent of transitory effect is more severe and relatively broader compared to the effect of the international financial crisis in particular during 2008.

This research aims to study the nature of the relationship between the government spending and the private investment in the non-oil sectors of the Saudi economy through testing the crowding out effect during four decades and using the Bootstrapping technique. Firstly we use the Box-Cox transformation to obtain a best model and we use also the test of cointegration, the causality test and the maximum likelihood estimation. The findings indicate that there is some evidence of the crowding out effect of the investment spending of the public enterprises on the private investment. Meanwhile, government spending on infrastructure is a catalyst to increase the level of private investment. We turn out also that the crowding in effect exceeds the crowding out effect. For the robustness of our results, we implement bootstrapping, which confirm the obtained results through linking the LR statistics to our main sample.

This paper aims to study the relationship between the Government Spending and the private investment in non-oil sectors of Saudi economy through the crowding-out effect during the last four decades. We use the Box-Cox transformation as a specification and the tests of cointegration and causality and the recursive maximum likelihood test. The findings exhibit that the crowding-out effect is verified in Saudi Arabia economy through the investment spending of the government institutions vis-à-vis the institutions of the private sector, meanwhile the results show that the government infrastructure spending supports the increase of the private investments.