Revue des Economies financières bancaires et de management
Volume 15, Numéro 1, Pages 68-87
2026-04-30

Foreign Direct Investment And Economic Diversification In Algeria: A Dynamic Analysis Using A Var Framework (1995–2024)

Authors : Bouchedda Mohamed El Mehdi . Miliani Yacine .

Abstract

This study investigates the dynamic relationship between foreign direct investment (FDI) and export diversification in Algeria over the 1995–2024 period using a Vector Autoregressive (VAR) framework. Overall, the findings underscore that while FDI serves as a driver of structural transformation, its long-term effectiveness depends on institutional reforms, improved absorptive capacity, and stronger domestic linkages.

Keywords

Foreign Direct Investment ; Export Diversification ; Structural Transformation ; VAR Model ; Algeria