The nexus between sectoral FDI and institutional quality: empirical evidence from Pakistan

Shah, Syed Hasanat; Ahmad, Malik Shoaib; Ahmed, Qazi Masood

doi:10.1080/00036846.2015.1103039

Cited by 68 publications

(54 citation statements)

References 36 publications

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“…However, the study fails to finds any short-run causality from institutional quality to FDI inflow. This result supports the findings of Shah et al' (2016) study. Other economic factors such as globalization and financial development show long-run causality to FDI inflow in South Asian countries.…”

Section: Resultssupporting

confidence: 93%

“…While a voluminous empirical study examines the relationship between institutional quality and economic growth, and FDI inflow and economic growth, however, the literature related to the nexus between FDI inflow and institutional quality is scanty. To the best of our knowledge, there are few studies that directly examine the relationship between FDI inflow and institutional quality (Jude and Levieuge, 2015;Buchana et al, 2012;Masron et al, 2013;Shah et al, 2016;Jindřichovská et al, 2020;Arifin, 2017;. Jude and Levieuge (2015) theoretically demonstrate that institutional quality affects FDI inflow through knowledge spillover.…”

Section: Introductionmentioning

confidence: 99%

“…They find that institutional quality is an additional factor which attracts the FDI apart from cheaper labor cost. Shah et al (2016) investigate the relationship between institutional quality and sectoral FDI inflow. They find no long-run and short-run causality from institutional quality to FDI inflow in the primary sector, and primary and service sectors, respectively.…”

Section: Introductionmentioning

confidence: 99%

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Institutional Quality and Foreign Direct Investment Inflows: Evidence from Cross-country Data with Policy Implication

Behera¹,

Bikash²,

Biswashree³

et al. 2020

IJEBA

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Purpose: The study examines the impact of institutional quality on Foreign Direct Investment (FDI) inflows for emerging economies from South Asiain the period 2002-2016. Other economic factors such as globalisation, financial development, and GDP are also considered. Design/Methodology/Approach: The study uses Im-Pesaran-Shin (IPS) panel unit root test to check stationarity property. It uses cross dependency (CD) and cross-sectional augments IPS tests to check cross-sectional dependency and heterogeneity across the group countries. Next, it uses panel ARDL-PMG tests to check the existence of long-relationship among variables. Then, we apply the panel Granger causality test to check the direction of causality. Finally, for the robustness of results, we use the Pedroni co-integration technique. Findings: The study finds the existence of a long-run relationship between institutional quality and FDI inflows. Other economic factors such as globalization and financial development show long-run and strong causality with FDI inflows. However, the short-run unidirectional causality from institutional quality to FDI inflows is not found for all the countries. Finally, institutional quality strongly causes FDI inflows provided paired with either globalisation or financial development. Practical Implications: Institutional quality increases the FDI inflows. Therefore, policymakers should focus on institutional quality along with globalization and financial development for higher inflows of FDI in emerging countries. Originality/Value: The study considers institutional quality as one of the inputs for FDI inflows in selected emerging economies from South Asia. Further, it creates an institutional quality index for the emerging countries to examine the impact on FDI inflows.

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Section: Resultssupporting

confidence: 93%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Institutional Quality and Foreign Direct Investment Inflows: Evidence from Cross-country Data with Policy Implication

Behera¹,

Bikash²,

Biswashree³

et al. 2020

IJEBA

View full text Add to dashboard Cite

show abstract

“…The 2013 Transparency International Corruption Perceptions Index put India at 94th position just behind Djibouti and Benin. Similarly, India is languishing at 120th position out of 178 in the Index of Economic Freedom while in terms of Average Institutional Quality Index (Shah et al, ), India stands at 52nd position out of 146 countries. The low standing of India on the Average Institutional Quality Index (a composite index based on data collected from International Country Risk Guide) provides a clue to understanding why India lags behind in cases of violence against women (particularly the crime of rape), poverty, and corruption, and how these issues dent India's international standing.…”

Section: Main Elements Of Chinese and Indian Soft Powermentioning

confidence: 99%

Comparative Analysis of Chinese and Indian Soft Power Strategy

Shah

Hasnat

Rosefielde

2017

Asian Politics and Policy

Self Cite

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In the last two decades, China and India emerged as potential contenders for great power status. During this period, both invested in soft power and capitalized on perceptions of their growing power to advance their interests without locking horns with entrenched stakeholders. This study compares the elements of Chinese and Indian soft power strategies and their impact on the international arena. The findings suggest that China's soft power strategy is more coherent than India's. China is doing well in cultural activities, people to people contacts, attracting foreign students from diverse backgrounds, and portraying itself as a progressive resilient economy while India has an upper hand projecting an image of country with a vibrant civil society and democratic order. Despite differences in spending and development, China's and India's strategies have been equally effective in favorably influencing foreign public perceptions.

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“…Much of this literature is devoted to the role and impact of general legal environments, the extent of corruption, and the governance quality [e.g. Nondo et al, 2016;Shah et al, 2016;Godinez, Liu, 2015;Sánchez-Martín et al, 2014;Zhang, 2014;Buracom, 2014]. Generally, institutions that concern these attributes are, indeed, relevant factors in both developed and developing countries.…”

Section: Theoretical and Empirical Literaturementioning

confidence: 99%

Free Market Institutions and FDI Performance in Emerging Asian Economies

Vogiatzoglou

2016

International Journal of Management and Economics

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This paper examines long-term developments in the quality and efficiency of free market institutional systems across thirteen emerging economies from South, South-east, and East Asia over the 1995-2014 period. The paper also empirically assesses the impact of free market institutions on a country's inward foreign direct investment (FDI) performance. We find that the free market institutional framework in most economies is still relatively inefficient, restrictive, and underdeveloped but has, nevertheless, substantially improved during the last twenty-year period. Our empirical results also indicate that a free market institutional system in a host-country is a factor that attracts inward FDI to emerging Asian economies by multinational companies. Consequently, policy makers should focus on further improving the quality of free market institutions.

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The nexus between sectoral FDI and institutional quality: empirical evidence from Pakistan

Cited by 68 publications

References 36 publications

Institutional Quality and Foreign Direct Investment Inflows: Evidence from Cross-country Data with Policy Implication

Institutional Quality and Foreign Direct Investment Inflows: Evidence from Cross-country Data with Policy Implication

Comparative Analysis of Chinese and Indian Soft Power Strategy

Free Market Institutions and FDI Performance in Emerging Asian Economies

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