Analysis of Foreign Direct Investment in Egypt

Globalization has made worldwide mobility of money extremely easy. Investors prefer to invest in places that offer attractive returns and are relatively less risky. The inflow of FDI gives developing countries access to capital that would otherwise be not available. This study's main objectives are to find out the status of Egypt as a destination for FDI, the factors that attract FDI into Egypt, and the factors that hinder the flow of FDI into Egypt. This study is based on secondary data and covers five years. The study analysis various determinants of FDI like market size, economic growth, infrastructure, political risk, corruption, labor market, raw materials, technological readiness, innovation, financial system, taxation, cost of capital, ease of doing business, and government policies. The study reveals that the parameters making Egypt an attractive destination is the vast market, high growth rate, strategic location, young labor force, competitive labor cost, well-organized financial system, low corporate and individual income taxes, improving innovation friendliness, improvement in the ease of doing business, and a reform-friendly government. The parameters that hinder FDI inflow into Egypt are insufficient infrastructural developments, low market efficiency, high-interest rates, high political risk, and a high level of corruption.