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Home and Host country determinants of financial investment flows to Pakistan

Author

Listed:
  • Irfan Ahmad Khan

    (School of Economics and Business Administration; China)

  • Mazhar Mughal

    (Pau Business School, France)

  • Junaid Ahmed

    (Department of Economics, Georg August University, Goettingen, Germany)

  • Hongbo Cai

    (School of Economics and Business Administration; China)

Abstract

This study examines the home and host-country economic, geographical and institutional factors that determine the volume of foreign direct investments (FDI) coming to Pakistan from the country's major investment partners. We find that host-country GDP, government spending, financial development, shared language and geographical distance play a significant role in driving FDI inflows. Regulatory environment and efficient and accountable government too are important. In contrast, infrastructure availability, current growth rates and occurrence of natural catastrophes do not appear to significantly influence FDI. Distance and linguistic affinity are stronger determinants of FDI than home or host GDP.

Suggested Citation

  • Irfan Ahmad Khan & Mazhar Mughal & Junaid Ahmed & Hongbo Cai, 2017. "Home and Host country determinants of financial investment flows to Pakistan," Economics Bulletin, AccessEcon, vol. 37(1), pages 361-376.
    • Handle: RePEc:ebl:ecbull:eb-16-00031
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    File URL: http://www.accessecon.com/Pubs/EB/2017/Volume37/EB-17-V37-I1-P33.pdf
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    References listed on IDEAS

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    Cited by:

    1. Bruno Emmanuel Ongo Nkoa, 2018. "Determinants of foreign direct investment in Africa: An analysis of the impact of financial development," Economics Bulletin, AccessEcon, vol. 38(1), pages 221-233.

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    More about this item

    Keywords

    FDI; Gravity model; Pakistan;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business

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