Institutional determinants of inward FDI : evidence from Pakistan

Uddin, M, Chowdhury, A, Zafar, S, Shafique, S and Liu, JL ORCID: https://orcid.org/0000-0002-2978-6022 2019, 'Institutional determinants of inward FDI : evidence from Pakistan' , International Business Review, 28 (2) , pp. 344-358.

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Abstract

FDI has been growing at a spectacular pace all over the world and emerging countries have been successful in attracting more FDI compared to developed countries. Institutional factors are becoming more important as determinants of inward FDI for emerging markets. However, research in this area is inadequate and also inconsistent in terms of findings. In this paper, we have examined the institutional determinants of Pakistani FDI inflows and also examined the relative importance of those factors. The paper has found that certain institutional determinants such as size of the government, legal structure and strong property rights, freedom to trade and civil liberty have strong positive effect on FDI inflows. Among the institutional variables, regulation has been found to be most important to influence inward FDI flow to Pakistan. The paper has also found evidence that there was a structural break in FDI flows in Pakistan which coincides with market liberalisation programme in early 1990s. This confirms the effectiveness of conducive institutional environment to attract foreign investment. Moreover, we have found that military government is more successful in attracting FDI compared to democratic government in Pakistan.

Item Type: Article
Schools: Schools > Salford Business School
Journal or Publication Title: International Business Review
Publisher: Elsevier
ISSN: 0969-5931
Related URLs:
Depositing User: JL Liu
Date Deposited: 19 Nov 2018 10:46
Last Modified: 23 Apr 2020 02:30
URI: http://usir.salford.ac.uk/id/eprint/48962

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