Hawraa Akbar, Randa Diab-Bahman, Anwaar Al Kandari
The main purpose of the study is to investigate the impact of economic diversification efforts, particularly fluctuations in FDI inflows, in the GCC. To examine the main points, UNCTAD (1993) model will be used as the main determination of FDI in Kuwait, as well as UNCTAD (1976) model for evaluating the Emirates. The research is conducted using quantitative data from the World Bank official website data from 1993 to 2015 for Kuwait, and Emirate from 1976 to 2015. Furhter, an ARDL model and Causality analysis are used to analyse the static data. The main result of this paper indicates that a main factor that effects the countries FDI is the GDP. This result is consistent with previous studies as most of FDI flows to oil and natural resource sectors which brings foreign investments into both countries, which has a significant impact on FDI. The other unexpected result of this research is that there is no significant impact between FDI and economic growth for both Kuwait and Emirates.