Role of Political Instability in Attracting FDI Inflow to Pakistan

  • Dil Jan Department of economics, Islamia College Peshawar, Pakistan
  • Muhammad Sibt e Ali PhD Scholar, School of Business Zhengzhou University, Henan, China
  • Muhammad Taqi M Phil Economics, School of Economics, Bahauddin Zakaryia University, Multan, Pakistan
  • Sabiha Parveen The Women University Multan, Pakistan
Keywords: FDI, Interest rate, Polity, ARDL Approach, Pakistan


Purpose:  The reason of this study is to recognize the impact of key determinants of overseas direct asset in case of Pakistan, based on annual information covering the period of 1981-2018.

Design/Methodology/Approach: After checking for still of the sequence, the technique of ARDL is used for estimation of long run parameters estimates and error alteration instrument for short run dynamics.

Findings: The results of the study indicate that politically stable environment and long term policies are necessary to attract foreign investors. furthermore, investment profile of any government also matter for direct asset in the country as the study conclusions reveal that marketplace size as well as domestic investment are positively related to foreign direct investment while taxes have negative association with overseas straight investment in the case of Pakistan.

Implications/Originality/Value: The most important factor for FDI inflow to Pakistan is interest rate or ease of doing business which has negative sign means inverse relation exists between the two variables.


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How to Cite
Jan, D., Sibt e Ali, M., Taqi, M., & Parveen, S. (2021). Role of Political Instability in Attracting FDI Inflow to Pakistan. Review of Politics and Public Policy in Emerging Economies, 3(1), 41-49.