The purpose of this article is to investigate the effect of determinants of foreign direct investment (FDI) within the model of gravity model in Greater Middle East countries over the period of 1984-2008. Hausman test indicates that we should apply the fixed-effects model. After estimating two gravity models for FDI and export, we come to the conclusion that GDP had positive effect on both variables, while agriculture population was ineffective on both. The stock market growth could lead to FDI attraction, while it is still ineffective on export. The exchange rate leads to FDI attraction and export decrease. The inflation is effective on both variables, while political risk has no significant effect on FDI and export.

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