Does the institutional quality matter to attract the foreign direct investment? An empirical investigation for Pakistan
Faculty / School
Faculty of Business Administration (FBA)
Department of Economics
Was this content written or created while at IBA?
South Asia Economic Journal
This study investigates the role of the institutions as a determinant of foreign direct investment (FDI) in the case of Pakistan by applying the autoregressive distributed lag (ARDL) cointegration technique. The results demonstrate that the institutional quality exerts long-run impact in determining the FDI inflows. The findings suggest that institutional quality is an important determinant of the FDI in Pakistan. The joint impact of institutional quality and trade openness is also significant and positively contribute to attract FDI in the short run as well as in the long run. The findings strongly support the hypothesis that simultaneous implementation of policy mix, that is, reducing trade barriers and improvement in institutional quality, play significant role in attracting FDI in a developing country like Pakistan.
HJRS - X Category, Scopus
Ahmad, M. H., & Ahmed, Q. M. (2014). Does the institutional quality matter to attract the foreign direct investment? An empirical investigation for Pakistan. South Asia Economic Journal, 15 (1), 55-70. Retrieved from https://ir.iba.edu.pk/faculty-research-articles/68