Revue Finance & marchés
Volume 12, Numéro 2, Pages 77-95
2025-09-21

The Fdi As A Strategic Driver Of Export Diversification In Algeria An Empirical Evidence (1995–2022).

Authors : Merniz Nour El Houda . Chikha Leila .

Abstract

This study investigates the role and impact of FOREIGN Direct Investment (FDI) in Algeria export diversification from 1995-2022. Using annual data and applying a combination of advanced econometric include a Time-Variant Coefficient Model (TVCM), dominance analysis and Relative importance. This study evaluates the relative impact of FDI alongside with trade openness, real effective exchange rate and oil export ration defined as the naturel resource curse. The results found that FDI is the most significant determinant of export diversification, contributing over 56% of the explained variance in the dominance analysis. Trade openness showed secondary importance, while the real exchange rate and oil export ratio had limited effect. These finding highlight the important role of FDI in transforming Algeria’s export structure due to the important implications for economic policy. Targeted strategies to attract and optimize FDI especially in non hydrocarbon sectors which serve as a powerful tool in reducing export concentration, promote economic resilience, and make Algeria’s trade patterns in line with global market demand.

Keywords

Export diversification, FDI, Trade Openness, real effective exchange, natural resource Curse