Abstract

These years Qatar has emerged as an important regional destination of foreign direct investment (FDI), which
demonstrates the recent success of several smaller economies in attracting FDI. This paper aims to investigate the
causal relationships between inward FDI and economic growth in the particular case of Qatar featured as oil
production country. Vector Autoregressive (VAR) Impulse Responses and Granger Causality Tests were adopted
as major research methods. Annual data set was used covering from 1990 to 2010. The main results demonstrated
the bi-directional causality and long-run relationships between FDI inflows and economic growth in Qatar. And to
attract FDI inflows into Qatar, the government shall continue its efforts in constructing promising economic and
investment environment; but to promote economic growth, it will recourse to other original momentum.

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