Transport infrastructure–FDI–economic growth nexus: evidence from the MENA region

Purpose This study examines the mediating role of road transport infrastructure in the foreign direct investment (FDI)–growth nexus in the Middle East and North Africa (MENA) region, where the integrated dynamics between infrastructure, FDI, and economic performance remain underexplored. Design/methodology/approach The analysis covers 15 MENA countries from 1996 to 2022 using harmonized macroeconomic and infrastructure data. A system of simultaneous equations is estimated through the Generalized Method of Moments (GMM) to address endogeneity, and Granger causality tests are employed to validate the direction of relationships. Findings The results reveal a two-way relationship between transport infrastrcture (TRI), FDI, and economic growth. Improved road networks enhance a country's ability to attract foreign investment, while FDI contributes positively to long-term economic performance. Institutional quality, trade openness (TO), and macroeconomic stability further influence these interactions, highlighting the importance of complementary policy conditions. Practical implications TRI functions as a strategic lever for FDI-led development rather than merely a physical asset. Effective policies should therefore integrate road investments with governance improvements, fiscal stability, and human capital development to transform infrastructure gains into sustained economic growth. Originality/value This study provides the first region-wide evidence for MENA that models road TRI as a mediator in the FDI–growth nexus, offering new insights for policymakers seeking to leverage FDI for long-term development.