The Impact of Quality of Institutions on Sectoral FDI: Evidence from Pakistan

Author Affiliation

Qazi Masood Ahmed is Professor and Director Research at Institute of Business Administration (IBA), Karachi

Faculty / School

Faculty of Business Administration (FBA)


Department of Economics

Was this content written or created while at IBA?


Document Type


Source Publication

Foreign Trade Review




Accounting | Business | Business Administration, Management, and Operations | Econometrics | Economics | Finance


This study addresses the issue whether institutional quality affects the sectoral FDI both in short run and long run in Pakistan. By employing ARDL co-integration technique, we analyse the impact of institutional quality on primary, manufacturing and services sectors FDI in Pakistan. The findings suggest that institutional quality matters in attracting FDI in manufacturing and services sectors in the long run while institutional quality does not have a significant impact on FDI in the primary sector. Moreover, results show that the impact of institutional quality on these sectors is not apparent in short run. The main findings from this research are that in long run institutional quality matters to attract substantial FDI in manufacturing and services sector of Pakistan. Hence, policies aimed at strengthening the institutional quality should be the priority for government. JEL: F21, O43, C22

Indexing Information

HJRS - Y Category, Web of Science - Emerging Sources Citation Index (ESCI)

Publication Status


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