The Impact of Economic Policies on Foreign Capital Flow: Case Study of Egypt 2012 - 2022

Bc. Abdulrahman Kodsi

Master's thesis

Abstract:

This thesis starts by defining the meaning of the concept economic in order to build a better understanding of the objectives of economic policies and to identify the two different ways, positive and normative economics, which are used to evaluate economic policies. The thesis also investigates the importance of implementing effective monetary and fiscal policies to achieve a sustainable economic development, stability of prices, and a low unemployment rate. Effective economic policies, alongside having an open business environment, attract Foreign Direct Investment (FDI) which significantly contribute to the development of fragile or developing states. Subsequently, the thesis studies the concept of foreign capital flow and its different types, while keeping the focus on the importance of (FDI) in contributing to the economic development of a country through the transfer of knowledge technologies and expertise. Attracting (FDI) requires having a competitive business environment, and this thesis focuses on how a low currency exchange rate can restore the competitiveness of the targeted market. To analyze the relation between the exchange rate and (FDI) inflows, this thesis takes the case study of Egypt in the period 2012-2022 – from 2012 after the end of the Egyptian uprising till 2022 – to study the possible reasons behind Egypt’s recent currency devaluation in 2022, and to formulate an econometric model which analyzes the correlation between the instruments of monetary and fiscal policies (exchange rate, interest rate, and d government expenditure) with the inflow of (FDI).

Keywords

Foreign Direct Investment (FDI), economic Development, political instability, monetary policy, fiscal policy, currency devaluation, Egypt, econometric modelling

Language used: English

Date on which the thesis was submitted / produced: 4. 4. 2023

Thesis defence

• Date of defence: 1. 6. 2023
• Supervisor: prof. Ing. Mansoor Maitah, Ph.D. Ph.D.
• Reader: Jana Skřivánková, B.E., externi

Czech University of Life Sciences Prague

Faculty of Economics and Management

Master programme / field:
Economics and Management / Economics and Management