Foreign Direct Investment (FDI) and Its Effects On Oil, Gas And Refinery Production and Their Exports: An Applied Study.

Abstract

The paper test the relationship between FDI and Oil, Gas and Refinery (OGR) industries production and their exports in seventeen countries selected from all the seven region in the world which are attracting FDI and leaders in the production and exports of OGR products through period from 1995 to 2011.  By using simple leaner regression model the parameters such as R Square, F Value, T Test, and Standard Division (SD) are used to identify the significant relationship in two directions between FDI and production and exports of OGR industries. The study results are supporting with the assumption that there is a positive and significant relationship between FDI and Exports of Oil and Gas Industries (XCO, XNG) in the selected countries and this result is also shown agreed with many other studies about FDI and exports from developed and developing countries. However the relation between FDI and Production of Crude Oil (PCO) is insignificant in 14 countries among the selected countries in the world regions and significant only in two countries such as U.A.E, and China, the direction of relation is not determine, so we can conclude that PCO does not affect by FDI. Otherwise there are positive relationships between FDI and production of natural gas (PNG) because we have three negative observations from fourteen observations but it is insignificant; we have only two high F values of fourteen countries, these countries are Nigeria, and China. So we can conclude that there is a positive relationship between FDI and PNG but this relation is insignificant. In case of the relation between FDI and Refinery Capacity (RC) there is a positive relationship between FDI and RC of all the selected countries, and this relation is strong in case of China, but it is weak in eleven countries and insignificant, instead of refinery industry depend on FDI in many other countries. Finally, relationship between FDI and its' effects on PCO, PNG, RC, XCO, XNG are analysed. The results are confirmed the continued insignificance of FDI effects on OGR production and significance on OGR exports in all the countries especially in Russia, U.A.E and China.  Few countries have negative direction of effects of FDI inflows on production and exports of OGR industries which are representing the highly developed countries such as U.K., France and Norway and developing countries such as Nigeria and Angola.

Keywords: Economic Growth, Foreign Direct Investment, Oil and Gas Production and Refinery Capacity, Exports of Oil and Gas, Multinational Corporations, Globalization Process.