FDI and JV distribution in Kurdistan Region

Authors

  • Sarhad Hamza University of Raparin, Department of Business Management, Ranya, Iraq https://orcid.org/0000-0001-8319-0804
  • Fahrettin Sumer American University of Iraq, Department of Business Administration, Sulaymaniyah, Iraq
  • Andrzej Cieślik niversity of Warsaw, Faculty of Economic Sciences, Department of Innovation and Development, Warsaw, Poland https://orcid.org/0000-0002-7834-7384

DOI:

https://doi.org/10.12775/bgss-2026-0033

Keywords

Kurdistan Region of Iraq (KRI) economy, Joint Venture (JV), Foreign Direct Investment (FDI)

Abstract

 This study investigates the determinants of inward foreign direct investment (FDI) and joint ventures (JVs) in the Kurdistan Region of Iraq (KRI). Using a hand-collected firm-level dataset from 2007–2021 and employing a Poisson Pseudo-Maximum Likelihood (PPML) estimator, the results show that both FDI and JVs are significantly hindered by greater geographical distance, exposure to ISIS-related conflict, and weaker local labour market conditions, while they are positively associated with GDP and infrastructure quality, including transportation networks and airport connectivity. When examining how inward FDI and JVs are distributed across the governorates of the KRI, the results reveal substantial regional differences in foreign investment allocation. Inward FDI is highly concentrated in Erbil, while JVs are more concentrated in Sulaymaniyah Governorate, suggesting distinct location preferences within the KRI. These findings contribute to the literature on investment in post-conflict economies by demonstrating the uneven geographic distribution of foreign investment across the region. ...

Author Biographies

Sarhad Hamza, University of Raparin, Department of Business Management, Ranya, Iraq

Sarhad Hamza is a lecturer at the Department of Business Management, University of Raparin, Ranya, Iraq and an associate lecturer at Henley Business School, University of Reading, United Kingdom-Whiteknights, Reading,

Fahrettin Sumer, American University of Iraq, Department of Business Administration, Sulaymaniyah, Iraq

Fahrettin Sumer is a Chair and Associate Professor at the Department of Business Administration, American University of Iraq, Sulaimani.

Andrzej Cieślik, niversity of Warsaw, Faculty of Economic Sciences, Department of Innovation and Development, Warsaw, Poland

Andrzej Cieślik is a Full Professor at the Faculty of Economic Sciences at the University of Warsaw.

References

Aghion, P., Burgess, R., Redding, S., & Zilibotti, F. (2005). Entry liberalisation and inequality in industrial performance. Journal of the European Economic Association, 3(2-3): 291-302. https://doi.org/10.1162/jeea.2005.3.2-3.291

Agosin, M.R., & Machado, R. (2005). Foreign investment in developing countries: does it crowd in domestic investment? Oxford Development Studies, 33(2): 149-162. https://doi.org/10.1080/13600810500137749

Alvarez, I., & Molero, J. (2005). Technology and the generation of international knowledge spillovers: An application to Spanish manufacturing firms. Research Policy, 34(9): 1440-1452. https://doi.org/10.1016/j.respol.2005.06.006

Baser, B. (2018). Homeland calling: Kurdish diaspora and state-building in the Kurdistan region of Iraq in the post-Saddam era. Middle East Critique, 27(1): 77-94. https://doi.org/10.1080/19436149.2017.1415512

Bevan, A.A., & Estrin, S. (2004). The determinants of foreign direct investment into European transition economies. Journal of Comparative Economics, 32(4): 775-787. https://doi.org/10.1016/j.jce.2004.08.006

Board of Investment (2021). List of licensed projects in Kurdistan Region from, Available at: https://govkrd.b cdn.net/OtherEntities/Board%20of%20Investment/English/Publication/License

Brainard, S.L. (1997). An empirical assessment of the proximity-concentration trade-off between multinational sales and trade. American Economic Review, 87(4): 520–544. Available at: http://www.jstor.org/stable/2951362

Correia, S., Guimarães, P., & Zylkin, T. (2020). Fast Poisson estimation with high-dimensional fixed effects. Stata Journal, 20(1): 95-115. https://doi.org/10.1177/1536867X20909691

Costantini, I. (2013). Statebuilding and foreign direct investment: The case of post-2003 Iraq. International Peacekeeping, 20(3): 263-279. https://doi.org/10.1080/13533312.2013.828519

De Mello Jr, L.R. (1997). Foreign direct investment in developing countries and growth: A selective survey. Journal of Development Studies, 34(1): 1-34. https://doi.org/10.1080/00220389708422501

Dunning, H.J. & Lundan, M.S. (2008). Multinational enterprises and global economy. Edward Elgar Publisher, 2nd edition. Cheltenham: Edward Elgar.

FDI Regulatory Restrictiveness Index (2008). OECD Global Forum VII on International Investment, Best practices in promoting investment for development, OECD Conference Centre, Paris, March 27−28.

Feenstra, R.C., & Hanson, G.H. (1997). Foreign direct investment and relative wages: Evidence from Mexico’s maquiladoras. Journal of International Economics, 42(3-4): 371-393. https://doi.org/10.1016/S0022-1996(96)01475-4

Fujita, M., Krugman, P., & Venables, A.J. (1999). The Spatial Economy: Cities, Regions, and International Trade. MIT Press.

Geise A., Jaworek, M., & Kuczmarska, M. (2025). Determinants of FDI from Visegrad countries in China and India : long-term and short-term perspectives. Bulletin of Geography. Socio-Economic Series, 70(70): 137-157. https://doi.org/10.12775/bgss-2025-0044

Gohou, G., & Soumaré, I. (2012). Does foreign direct investment reduce poverty in Africa, and are there regional differences? World Development, 40(1): 75-95. https://doi.org/10.1016/j.worlddev.2011.05.014

Hasan, Q.M., & Perot, K.A. (2021). Production sharing contracts and rentierism: Reforming transparency gaps in Kurdistan’s oil and gas contracts. The Extractive Industries and Society, 8(2): 100899. https://doi.org/10.1016/j.exis.2021.100899

Heshmati, A., & Davis, R. (2007). The determinants of foreign direct investment flows to the federal region of Kurdistan. IZA Discussion Papers No. 3218.

Iraq-Business News. (2011). Erbil Ranked 5th for Foreign Direct Investment. March 17. Available at: http://www.iraq-businessnews.com/2011/03/16/erbil-ranked-5th

Kanabi Yaba, T. (2018). Effects of FDI on economic development in Kurdistan Region. International Journal of Social Sciences & Educational Studies, 5(2): 195-204. https://doi.org/10.23918/ijsses.v5i2p195

Khdir, S., & Cieślik, A. (2025). Regional concentration of FDI and sustainable economic development. Sustainability (Switzerland), 17(16): 7449. https://doi.org/10.3390/su17167449

Kola-Bezka, M., & Kuzel, M. (2023). Global Cities and Multinational Enterprises: integrating the existing concepts for future research studies. Bulletin of Geography. Socio-economic Series, 60(60): 101-125. https://doi.org/10.12775/bgss-2023-0018

Krugman, P. (1991). Geography and Trade. MIT Press.

Ma, A.C. (2006). Geographical location of foreign direct investment and wage inequality in China. World Economy, 29(8): 1031-1055. https://doi.org/10.1111/j.1467-9701.2006.00812.x

Markusen, J.R. (1995). The boundaries of multinational enterprises and the theory of international trade. Journal of Economic Perspectives, 9(2): 169–189. https://doi.org/10.1257/jep.9.2.169

Mukim, M., & Nunnenkamp, P. (2012). The location choices of foreign investors: A district‐level analysis in India. World Economy, 35(7): 886-918. https://doi.org/10.1111/j.1467-9701.2011.01393.x

Natali, D. (2007). The spoils of peace in Iraqi Kurdistan. Third World Quarterly, 28(6): 1111-1129. https://doi.org/10.1080/01436590701507511

OECD (2021). Middle East and North Africa Investment Policy Perspectives, OECD Publishing, Paris.

Sumer, F. & Joseph, J. (2018). The paradox of the Iraqi Kurdish referendum on independence: contradictions and hopes for economic prosperity. British Journal of Middle Eastern Studies, 45(4): 574–588. https://doi.org/10.1080/13530194.2018.1430533

UNCTAD (2026). Data Insights: Foreign direct investment. UNCTADstat. Available at: https://unctadstat2.unctad.org/insights/theme/238 (Accessed: 3 October 2026).

Unegbu, A.O., & Okanlawon, A. (2015). Direct foreign investment in Kurdistan Region of the Middle East: Non-oil sector analysis. British Journal of Economics, Management & Trade, 6(1). 38-49. https://doi.org/10.9734/BJEMT/2015/14001

Weidner, M., & Zylkin, T. (2021). Bias and consistency in three-way gravity models. Journal of International Economics, 132: 103513. https://doi.org/10.1016/j.jinteco.2021.103513

World Bank Group. (2016). The Kurdistan Region of Iraq-2016, Available at: https://openknowledge.worldbank.org/handle/10986/24706?show=full

World Bank Group. (2010). Investment law reform: a handbook for development practitioners. World Bank. Available at: https://openknowledge.worldbank.org/handle/10986/25206

Downloads

Published

2026-10-28

How to Cite

1.
HAMZA, Sarhad, SUMER, Fahrettin and CIEŚLIK, Andrzej. FDI and JV distribution in Kurdistan Region . Bulletin of Geography. Socio-economic Series. Online. 28 October 2026. No. 74, pp. 7-29. [Accessed 28 October 2026]. DOI 10.12775/bgss-2026-0033.

Issue

No. 74 (2026): December (early view)

Section

Articles

License

Copyright (c) 2026 Sarhad Hamza, Fahrettin Sumer, Andrzej Cieślik

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Title, logo and layout of journal Bulletin of Geography. Socio-economic Series are reserved trademarks of Bulletin of Geography. Socio-economic Series.

Stats

Number of views and downloads: 6
Number of citations: 0