The study analyzed the bilateral foreign direct investment between GCC countries and developed economies using a Gravity Model. The study has applied a new approach to the panel data set on bilateral foreign direct investment flows between 6 GCC countries and 8 developed countries, from 2001 and 2012. GDP per capita for source countries and population of the source, and destination economies were almost positive and significant determinants of bilateral Foreign Direct Investment flows. Geographical proximity has exerted a significant positive influence on bilateral foreign investments. Investors may seek diversity in the investments and support GCC countries for foreign investment.
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