The importance of foreign direct investment in Algeria and its impact on its trade balance using the ARDL model

Abstract

This study dealt with the importance of foreign direct investment in Algeria and its impact on its trade balance during the time period of 2003-2018 using the ARDL model. The study concluded that foreign direct investment, gross domestic product and exchange rate have a positive impact on trade balance, and that economic openness has a negative impact on trade balance. Hence, the study recommends diversifying exports by attracting foreign direct investment in the non-oil sectors in order to improve national economy.