The Impact of Fish Production on Marine Trade Balance and Foreign Direct Investment: An Empirical Study of the GCC Economies

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This study aims to identify the impact of fish output on the marine fish trade balance; as well as foreign investment opportunities in six Gulf Cooperation Council (GCC) countries over the period of 1985–2016. We applied several panel estimation techniques; including fixed effects (FE); generalized method of moments(GMM); instrumental variable-fixed effect (IV-FE); and panel ARDL.FE model estimates show that marine fish production has a positive and significant effect on the marine trade balance; with a 1% increase in fish production leading to a more than 1%increase in the trade balance. Estimates of system GMM and IV-FE methods, which allow for the controlling of endogeneity; suggest an even larger effect. When we consider the relationship with foreign direct investment (FDI); FE; GMM and IV-FE show no significant effects. However; the ARDL model shows a statistically significant long-term relationship between fish production and both trade balance and inward foreign direct investment.