Century: A SLR Approach (Study Case at Islamic Countries)

This article attempts to capture the economic development of Islamic countries in the past 30 years. The extent to which the Islamic State is able to utilize its resources with limited mastery of technology. Various obstacles that arise cause many Islamic countries in the position as developing countries that are still dependent on foreign direct investment. We presented a systematic literature review of relevant publications. We set the data range between 1981 to 2018 of Islamic countries. The aim of the intense paper is on the impact of foreign direct investment on economic growth in Islamic countries. Using empirical study methods try to compare and measure how foreign direct investment (FDI). We can also see how the pattern of FDI in several Islamic countries can help their economic growth go forward or backward. This phenomenon attracts the author to conduct an empirical study of the effect of foreign direct investment (FDI) on the economic growth of developing Muslim countries. What is funded by foreign direct investment (FDI) and which economic sector can be built from direct foreign investment (FDI).


Introduction
This paper uses Islamic countries as samples. Most of them are developing countries.
Developing countries are generally unable to exploit the benefits from their abundant natural resources due to inadequate human and physical capital and technological knowhow (Iamsiraroj, Ulubasoglu, 2015). Many of these countries are also typically constrained by weak protection of property rights, corruption, and severe civil, political and economic instability, such setbacks hinder their capital accumulation and become obstacles to using already existing resources, consequently, international sources of growth such as development aid assistance, loans, portfolio flows, and foreign direct investment (FDI), become highly pursued items on their economic agenda (Iamsiraroj, Ulubasoglu, 2015). The World Bank (2010) reports that the overall share of developing countries in global FDI inflows was 37% in 2010, representing more than a three-fold increase since 2000.
Globally, FDI has grown from about 0.5% of the world's GDP in 1970 to over 3% in 2008, thus, the growth effects of FDI and the channels through which these effects operate are of great importance to understand (Iamsiraroj, Ulubasoglu, 2015).
The objective of this paper is to revisit the impact of foreign direct investment to economic growth in Islamic countries. Previous researches show that FDI has significant effect on economic growth (Chisagiu, 2015); Tahir et al, 2015;Iamsiraroj and Ulubasoglu, 2015;Su and Liu, 2016;and Sunde, 2017). We use just one variable which is foreign direct investment in this study. Previous studies' result were financial flows level but also their composition and volatility matter (Loayza et al., 2007;Ramey and Ramey, 1995). Despite a significant body of theoretical and empirical research exploring these connections, extant empirical literature does not offer a clear picture on the central issue of whether FDI has globally any effect on growth (Iamsiraroj, Ulubasoglu, 2015). Financial flows increase the level of domestic expenditure in a similar way to windfall gains from natural resources (Corden and Neary, 1982).
The impact of FDI mainly depends on the type of activities it finances. FDI in different forms, or in the same form but in different economic environments, is likely to affect economic growth differently (Borenztein et al., 1998;Wooster and Diebel, 2010). contrary, FDI concentrated in the manufacturing sector, as is the case in most Asian economies, can enhance growth by leveraging a low-cost skilled labor force. Failure to distinguish between different categories of FDIs has been interpreted by Stiglitz (2008) as a possible explanation for the difficulty in clearly identifying the role FDI plays in the development process. Using meta-regressions for 103 micro and macro studies, Bruno and Campos (2013) show that the 3 number of studies where FDI supports growth is four to five times the number of studies where it does not.

Data Sources And Literature Selection
Following established methods (Bergstrom, van Winsen, and Henriqson, 2015;Dorn, Shweiger, and Albers, 2016; Skrzek-Lubasinska and Szaban, 2018), we presented a systematic literature review of relevant publications. The population of this research is Islamic countries. The sample that used is the data range between 1981 to 2018 of Islamic countries (in this research, we use 10 Islamic countries that presented data between 1981 to 2018).
As a result of this process, we included 20 articles and then examined the bibliographical references to check the validity of the inquiry and to avoid any potential omissions (Conz and Magnani, 2019). According to IMF and OECD definitions, direct investment reflects the aim of obtaining a lasting interest by a resident entity of one economy (direct investor) in an enterprise that is resident in another economy (the direct investment enterprise), the lasting interest implies the existence of a long term relationship between the direct investor and the direct investment enterprise and a significant degree of influence on the management of the latter (Duce, 2003). Therefore, FDI investment in foreign country can take form of mergers and acquisitions (soleventure) or joint venture) or greenfield investment (Cro and Martins, 2020).

FDI's Direct Effect On Growth
The impact of FDI mainly depends on the type of activities it finances. Our result shows that FDI has significant effect on economic growth, like the previous research by Chisagiu (2015), Tahir et al (2015), Iamsiraroj and Ulubasoglu (2015), Su and Liu (2016), and Sunde (2017). FDI in different forms, or in the same form but in different economic environments, is likely to affect economic growth differently (Borenztein et al., 1998;Wooster and Diebel, 2010). For instance, in low-income African countries or natural-resource-rich economies where FDI is associated with natural resource extraction, it may hamper the diversification of the manufacturing sector and ultimately hurt growth, but on the contrary, FDI concentrated in the manufacturing sector, as is the case in most Asian economies, can enhance growth by leveraging a low-cost skilled labor force (Combes, 2019). Failure to distinguish between different categories of FDIs has been interpreted by Stiglitz (2008)

Conclusion
This study provides an empirical picture of how the different effects of FDI on