Determinants of Foreign Direct Investment in Pakistan

Abstract

Foreign Direct Investment (FDI) is an investment in which investor from some other country invest in an enterprise of a different economy and the purpose of investment is to serve the business interests of the investor in that economy. Overseas investors always inclined towards those countries which assist them in terms of both infrastructure and encouraging policies for investments. Solid policies from the host country also circulate foreign investment into accurate areas where they are excessively desirable. Another reason of FDI flows from developed countries to developing countries is their comparatively young and inexpensive men-power. Foreign Direct Investment is playing key role in the development of any country's economy and especially in developing countries like Pakistan. The study was to statistically analyze the determinants of FDI inflows in Pakistan. The study covered data of macro level indicators during the period from FY 1973-74 to FY 2007-08 which would help in identifying determinants of FDI inflows in Pakistan.