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This article analyzes whether trade openness and foreign direct investment are driving factors for human development in the Middle East and North African region. We used data of 13 MENA countries over the period of 2002 to 2015. We employed the panel cointegration analysis and vector error correction model to test the short- and long-run relationships as well as the causality between the variables. Findings indicate that in the long run the coefficients of trade openness and foreign direct investment are statistically significant. However, in the short run, the results show that only foreign direct investment and domestic investment exert a significant impact on human development.

Trade Openness, Foreign Direct Investment, and Human Development: A Panel Cointegration Analysis for MENA Countries