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Navigating the Path to Increase FDI in South Asia: The Role of Economic Freedom

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  • Muhammad Munawar Hussain

    (Ph.D (Economics) Scholar, University of Education, Lahore, Assistant Professor (Economics) Higher Education Department, Govt. of the Punjab, Lahore, Pakistan)

  • Asim Iqbal

    (Associate Professor, Department of Economics, Division of Management and Administrative Science, University of Education, Lahore, Pakistan)

  • Syed Jaffar Abbas

    (Ph.D (Economics) Scholar, University of Education, Lahore, Lecturer (Economics) Higher Education Department, Govt. of the Punjab, Lahore, Pakistan)

  • Sara Shahid

    (Ph.D (Economics) Scholar, University of Education, Lahore, Pakistan)

  • Laila Khalid

    (Ph.D (Economics) Scholar, University of Management and Technology, Lahore, Lecturer (Economics) Higher Education Department, Govt. of the Punjab, Lahore, Pakistan)

Abstract

Scholars and policymakers have paid special attention to the link between economic freedom and FDI. This research aims to examine this relationship within the South Asian context through a panel data analysis from 2001 to 2021. A panel fixed effect model is employed to assess the influence of economic freedom on FDI and other controlling variables, such as GDP per capita, population density, inflation, government expenditure on education, and general government final consumption expenditure are also taken into consideration. The results indicate that an increase in economic freedom, GDP per capita, population density, and government consumption leads to an increase in FDI. These findings suggest that South Asian policymakers should prioritize increasing economic freedom as a means to attract more FDI. This study offers valuable insights for policymakers seeking to comprehend the factors affecting FDI and ways to increase it in their respective countries. By promoting economic freedom, a more favorable investment climate can be created, thereby attracting more FDI which may help to create jobs, and improve living standards for citizens.

Suggested Citation

  • Muhammad Munawar Hussain & Asim Iqbal & Syed Jaffar Abbas & Sara Shahid & Laila Khalid, 2022. "Navigating the Path to Increase FDI in South Asia: The Role of Economic Freedom," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 8(4), pages 350-359, December.
    • Handle: RePEc:rfh:jprjor:v:8:y:2022:i:4:p:350-359
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    References listed on IDEAS

    as
    1. John H. Jackson, 1997. "The World Trading System, 2nd Edition: Law and Policy of International Economic Relations," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262600277, April.
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