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The Influence of the Macroeconomic Variables and Business Environment on the Foreign Direct Investment Inflows in Pakistan: The Moderating Role of Political Stability

Shahzad, Arfan (2013) The Influence of the Macroeconomic Variables and Business Environment on the Foreign Direct Investment Inflows in Pakistan: The Moderating Role of Political Stability. PhD. thesis, Universiti Utara Malaysia.

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Abstract

The study has the attributes of pioneering attempt in examining the research gaps and evaluating the role of the moderating effect of political stability (PS) on the relationships between macroeconomic variables, business environment variables and the foreign direct investment (FDI) inflows in the case of promising nation such as Pakistan in the SAARC region. Indeed, the study poses a new stream of research in investigating the effect of political stability as moderating variable, recognizing the importance of PS as a critical variable in the course of foreign investment, thus, the research framework of this study was designed with integration of New Growth theory and firm theory in tracing the impact of political stability on foreign direct investment. This study was confined to the annual data for the period 1991 to 2011 obtained from the official sources such as SBP, UNCTAD, World Bank and IMF. In its empirical analysis, this study used the ADF test to check the stationary of the data using EViews and hierarchal regression using SPSS statistical software packages. The moderating effects of the determinants political stability on the relationships were empirically examined. The findings of this study revealed that GDP growth rate, degree of openness, inflation rate, corruption control index and political stability were significant predictors of FDI inflows; whereas, other determinants such as exchange rate and infrastructure were not significant in the case of Pakistan. These findings, therefore, strongly suggested that political stability is very important for the country’s domestic and foreign investment in the future course of direction. The study makes several practical inferences for designing suitable macroeconomic policy and undertaking measures to promote a high economic growth with rising FDI inflows in the political economy of Pakistan

Item Type: Thesis (PhD.)
Supervisor : Fadzil, Faudziah Hanim and Ali Mohamed Ali Mithani, Dawood
Item ID: 3489
Uncontrolled Keywords: Macroeconomic Variables, Business Environment, Political Stability, Foreign Direct Investment, Pakistan
Subjects: H Social Sciences > HJ Public Finance
J Political Science > JC Political theory
Divisions: Othman Yeop Abdullah Graduate School of Business
Date Deposited: 10 Sep 2013 01:00
Last Modified: 19 Sep 2022 07:51
Department: Othman Yeop Abdullah Graduate School of Business
Name: Fadzil, Faudziah Hanim and Ali Mohamed Ali Mithani, Dawood
URI: https://etd.uum.edu.my/id/eprint/3489

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