Author(s): Jihen Bousrih, Kolthoom Alkofahi
The study aims to investigate the relation between the foreign direct investment (FDI) and some selected economic indicators such as economic growth, robustness of the capital market and the employment. We apply a VECM model over the period 1990-2019 to study the short run and long run relation between the selected variables. After testing the robustness of the model, the results were significant and supportive for the determinants of FDI. The foreign direct investment is affected by several factors. The paper’s findings suggest a significant long run relationship between FDI, robustness of the capital market and employment. We conclude an insignificant relation between FDI and economic growth in Saudi Arabia.