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Nexus Between Institutional Quality and Foreign Direct Investment Inflows: Panel Data Analysis of SAARC Countries

Author

Listed:
  • Ishfaq Hamid

    (MICA- The School of Ideas)

  • Md Shabbir Alam

    (University of Bahrain)

  • Imran Ali Baig

    (National Institute of Technology)

  • Pabitra Kumar Jena

    (School of Economics, Shri Mata Vaishno Devi University)

Abstract

This study examines the nexus between institutional quality and FDI inflows in SAARC countries for the sample period of 1996–2017. The analysis is carried out using panel ARDL and panel quantile regression to draw the inferences. Empirical findings reveal that corruption, political stability, government effectiveness, and GDP per capita have a positive and statistically significant impact on FDI inflows. The result of panel quantile regression shows that all the estimates of government effectiveness, GDP per capita, and trade openness are positive and statistically significant. This exploration suggests that institutional quality matters to the progression of FDI inflows. Along these lines, effective institutional changes should be a precedence for policymakers as this sets up an admirable investment climate to pull in FDI inflows in SAARC countries.

Suggested Citation

  • Ishfaq Hamid & Md Shabbir Alam & Imran Ali Baig & Pabitra Kumar Jena, 2024. "Nexus Between Institutional Quality and Foreign Direct Investment Inflows: Panel Data Analysis of SAARC Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 7993-8019, June.
  • Handle: RePEc:spr:jknowl:v:15:y:2024:i:2:d:10.1007_s13132-023-01252-6
    DOI: 10.1007/s13132-023-01252-6
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    More about this item

    Keywords

    Institutional quality; Foreign direct investment; SAARC countries; Panel ARDL; Panel quantile;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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