Determinants of Bilateral FDI Inflows in Pakistan from Major Investing Countries: A Dynamic Panel Approach

Mahmood, Haider (2016): Determinants of Bilateral FDI Inflows in Pakistan from Major Investing Countries: A Dynamic Panel Approach. Published in: Journal of Applied Economic Sciences , Vol. 11, No. 7 (4 July 2016): pp. 1471-1476.

Abstract

As attracting inflow of Foreign Direct Investment (FDI) is a red-hot issue nowadays and it has become an ultimate goal of any developing country. This paper targets to inspect the effects of income, institutional quality (democracy) and trade openness on FDI inflows of Pakistan by applying dynamic PMG estimators. 24 FDI contributing countries are considered for a period of 1985-2014 for investigation. This paper finds the evidence for a positive contribution of income of both Pakistan and investing countries and trade openness in FDI inflows. Institutional quality can only attract FDI in short run.

• Item Type: MPRA Paper
• Language: English
• Keywords: FDI Inflows, Income, Democracy, Trade Openness
• Subjects: F - International Economics > F2 - International Factor Movements and International Business; F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements

References

Agrawal, G. and Khan, M., A., (2011). Impact of FDI on GDP Growth: A Panel Data Study. European Journal of Scientific Research, 57:2, 257-264.

Akhtar, M., H., (2000). The Determinants of Foreign Direct Investment in Pakistan: An Econometric Analysis. The Lahore Journal of Economics, 5:1, 1-22.

Azam, M. and Lukman, L., (2008). Determinants of Foreign Direct Investment in India, Indonesia and Pakistan: A Quantitative Approach. Journal of International Business Management, 4:1, 31-44.

Bevan, A. and Estrin, S., (2004). The determinants of Foreign Direct Investment in to European Transition Economics. Journal of Comparative Economics, 32:4, 775-787.

Buch, C., M., Kokta, R., M. and Piazolo, D., (2003). Foreign Direct Investment in Europe: Is there redirection from the South to the East? Journal of Comparative Economics, 31: 1, 94-109.

Carbaugh, R., (2000). International Economics. (7th Edition) South-Westrern College Publishing, Ohio.

De Mello, L., R., (1997). Foreign Direct Investment in developing countries and growth: A selective survey. Journal of Development Studies, 34:1, 1-34.

Doces, J., A., (2010). The Dynamics of Democracy and Direct Investment: An Empirical Analysis. Palgrave Macmillan Journals, 42:3, 329-351.

Easterly, W., (2001). The lost decades: Developing countries stagnation in spite of policy reforms 1980-1998. Journal of Economic Growth, 6:2, 135-157.

Frenkel, M., Funke, K. and Stadtmann, G., (2004). A panel analysis of bilateral Foreign Direct Investment flows to emerging economies. Economic Systems, 28:2, 281-300.

Globerman. S. and Shapiro. D., (2003). Governance Infrastructure and US Foreign Direct Investment. Journal of International Business Studies, 34:1, 19-39.

Goyal, A., (2007). Corporate Social Responsibility as a Signaling Device for Foreign Direct Investment. International Journal of the Economics of Business, 13:1, 145-163.

Hsiao, F., S., T. and Hsiao, M.,C., W., (2006). FDI, Export and Growth in East and Southeast Asia- Evidence from Time-Series and Panel Data Causality Analyses. Journal of Asian Economics, 17:6, 1082-1106.

Ledyaeva, S. and Linden, M., (2008). Testing for Foreign Direct Investment Gravity Model for Russian Regions, The European Journal of Comparative Economics, 5:1, 87-105.

Ledyaeva, S., Karhunen, P. and Kosonen, R., (2013). Birds of a Feather: Evidence on commonality of Corruption and Democracy in the origin and location of foreign investment in Russian regions. European Journal of Political Economy, 32:1, 1-25.

Liu, X., Wang, C. and Wei, Y., (2001). Causal Links Between Foreign Direct Investment and Trade in China. China Economic Review, 12: 2-3, 190-202.

Tinbergen, J., (1962). Shaping the World Economy: Suggestions for an International Economic Policy. The Twentieth Century Fund, New York.

Ahmad, K. & Mahmood, H. (2013). Macroeconomic Determinants of National Savings Revisited: A Small Open Economy of Pakistan. World Applied Sciences Journal, 21(1), 49-57.

Ahmad, K., & Mahmood, H., (2013). Openness-Inflation Puzzle: Evidence from Pakistan. The Bangladesh Development Studies, 69-78.

Ahmad, N., Iqbal, A. and Mahmood, H. (2013). CO2 Emission, Population and Industrial Growth linkages in Selected South Asian Countries: A Co-integration Analysis. World Applied Sciences Journal, 21(4), 615-622.

Alkhateeb, T.T.Y, Mahmood, H. & Sultan, Z.A. (2016). The Relationship between Exports and Economic Growth in Saudi Arabia. Asian Social Science. 12(4), 117-124.

Habib, A., Rehman, V, Zafar, T., Mahmood, H., (2016). Does sustainability hypothesis hold in developed countries? A panel co-integration analysis. Quality & Quantity, 50 (1), 1-25.

Hassan, M.U., Mahmood, H. & Hassan, M.S. (2013). Consequences of Worker’s Remittances on Human Capital: An In-Depth Investigation for a Case of Pakistan. Middle-East Journal of Scientific Research, 14 (3), 443-452.

Hassan, MU, Hassan, MS, & Mahmood, H., (2013). An empirical inquisition of the impact of exchange rate and economic growth on export performance of Pakistan. Middle-East Journal of Scientific Research 14 (2), 288-299.

Mahmood, H. and Chaudhary, A.R. (2012). A Contribution of Foreign Direct Investment in Poverty Reduction in Pakistan. Middle-East Journal of Scientific Research, 12 (2), 243-248.

Mahmood, H., & Asif, M., (2016). An empirical investigation of stability of money demand for GCC countries. International Journal of Economics and Business Research, 11 (3), 274-286.

Mahmood, H., & Chaudhary, A.R. (2009). Application of endogenous growth model to the economy of Pakistan: A cointegration approach. Pakistan Journal of Commerce and Social Sciences, 2, 16-24.

Mahmood, H., (2016). Revisited Money Demand function for GCC countries and testing its stability. Journal of Economics and Economic Education Research, 17 (2), 137 – 148.

Mahmood, H., & Chaudhary, A.R. (2012). Impact OF FDI on Human Capital in Pakistan. Asian Journal of Empirical Research, 2(3), 84-91.

Mahmood, H., & Chaudhary, A.R. (2012). Impact of Sector-Specific FDI on Sector-Specific Labour Productivity in Pakistan. World Applied Sciences Journal, 19 (4), 566-574.

Mahmood, H., & Chaudhary, A.R. (2012). Foreign Direct Investment-Domestic Investment Nexus in Pakistan. Middle-East Journal of Scientific Research, 11 (11), 1500-1507.

Mahmood, H., & Chaudhary, A.R. (2012). A Contribution of Foreign Direct Investment in Poverty Reduction in Pakistan. Middle-East Journal of Scientific Research, 12 (2), 243-248.

Mahmood, H., & Chaudhary, A.R. (2012). FDI, Financial Market Development, Trade Openness and Economic Growth. World Applied Sciences Journal, 19 (8), 1125-1132.

Mahmood, H., & Chaudhary, A.R. (2012). FDI, Population Density and Carbon Dioxide Emissions: A Case Study of Pakistan. Iranica Journal of Energy & Environment, 3(4), 254-260.

Mahmood, H., & Chaudhary, A.R. (2012). Impact of Sector-Specific FDI on Sector-Specific Employment in Pakistan. Middle-East Journal of Scientific Research, 11 (11), 1514-1523.

Hassan, MS., Ahmad, I., & Mahmood, H., (2012). Does Growth Led Inflation Hypothesis & Locus Critique Exist in Pakistan? A Time Series Study. World Applied Sciences Journal, 20(7), 917-926.

Mahmood, H., (2016). Testing fiscal sustainability under inter-temporal budget constraint in Saudi Arabia. Actual Problems of Economics 185 (11), 356-362.

Mahmood, H., A Ali, MI Chani (2013). Determinant of Aggregate Imports Demand Function: A Case of Tunisia. International Journal of Economics and Empirical Research, 1 (6), 74 – 82.

Mahmood, H., Alkhateeb, T.T.Y., N Maalel (2016). Egyptian intra agriculture trade with Common Market for Eastern and Southern Africa trading partners: A gravity model. International Journal of Economics and Financial Issues 6 (6S), 177-182.