Motivating Factors of Fdi in Pakistan
Motivating factors of foreign direct investment in Pakistan
Abstract:
Purpose – the influence of market size and growth to attract FDI has been examined.
Methodology/approach – This paper investigates whether FDI motivators affect FDI based on time series data for Pakistan covering period from 1988-2011.
Findings – The result of the study indicate positive and significant relationship between FDI and market size and between FDI and growth rate.
Originality/value – The basic contribution of this study is to help identify the main FDI determinants .Another Contribution of this study can be mannered as, it is going to direct investors in evaluating the importance of market size and growth rate while making decisions to FDI in Pakistan. It will also contribute by providing with the information regarding the relation between market size , growth rate and FDI.
Keywords: foreign direct investment, growth rate, inflation, time series data, Pakistan
Introduction:
In last few decades extensive FDI inflows have been seen in developing countries. Developing countries compete to attract FDI. Primary restrictions in the way of FDI have been removed as the importance of fdi has been recognized. FDI is considered a long term source of capital and advanced technologies. . FDI is going to be the strongest tool for the measurement of globalization strength of a country. In addition to this foreign investors bring world’s best management practices. As a result of FDI more and more industries are setup in host countries increasing employment opportunities there. FDI is acting as a key mechanism to eliminate TGAP (technological gap) between developing and developed countries. FDI also promotes international trade.FDI is considered most powerful way of transforming traditional economies into modern economies. China, India and Korea are best examples of these transformed economies. Many studies have been conducted to study various factors that can whether directly or
Abstract:
Purpose – the influence of market size and growth to attract FDI has been examined.
Methodology/approach – This paper investigates whether FDI motivators affect FDI based on time series data for Pakistan covering period from 1988-2011.
Findings – The result of the study indicate positive and significant relationship between FDI and market size and between FDI and growth rate.
Originality/value – The basic contribution of this study is to help identify the main FDI determinants .Another Contribution of this study can be mannered as, it is going to direct investors in evaluating the importance of market size and growth rate while making decisions to FDI in Pakistan. It will also contribute by providing with the information regarding the relation between market size , growth rate and FDI.
Keywords: foreign direct investment, growth rate, inflation, time series data, Pakistan
Introduction:
In last few decades extensive FDI inflows have been seen in developing countries. Developing countries compete to attract FDI. Primary restrictions in the way of FDI have been removed as the importance of fdi has been recognized. FDI is considered a long term source of capital and advanced technologies. . FDI is going to be the strongest tool for the measurement of globalization strength of a country. In addition to this foreign investors bring world’s best management practices. As a result of FDI more and more industries are setup in host countries increasing employment opportunities there. FDI is acting as a key mechanism to eliminate TGAP (technological gap) between developing and developed countries. FDI also promotes international trade.FDI is considered most powerful way of transforming traditional economies into modern economies. China, India and Korea are best examples of these transformed economies. Many studies have been conducted to study various factors that can whether directly or
References: Aqeel, A., & Nishat,M. (2004). "The determinants of foreign direct investment in Pakistan." The Pakistan Development Review 43(4): 651–664.