Abstract
In this paper we have discussed the vital role of political stability on the link between macroeconomic variables and FDI .For this purpose we have used a data of year 1991 to 2011.In this empirical analysis we have used ADF test for the checking the stationary of the data and other software’s are SPSS and eviews.This result of this study have made sure that import ,BOP, export and GDP growth rate have significant impact on the FDI inflows in the Pakistan and inflation has a negative impact on the FDI based on this research has proved that political stability is crucial for the expansion of foreign direct investment.
Highlights
Foreign Direct investment has on the most famous source of getting investment from other countries
The boarder area of this study is to investigate the GDP and other factors of economy which affect Foreign Direct Investment? In the age of 21 century it has developed that FDI is based on the different economic factors like capital inflows
Many developing country are offering lucrative package for the foreign investors .For instance china,Russia,and India are working on it .they are offering low tax rate, liberalized trade policy and are providing a moral security system .according to world development report(2011) foreign direct investment is reflect the main crucial of the economic growth
Summary
Foreign Direct investment has on the most famous source of getting investment from other countries. Many developing country are offering lucrative package for the foreign investors .For instance china,Russia,and India are working on it .they are offering low tax rate, liberalized trade policy and are providing a moral security system .according to world development report(2011) foreign direct investment is reflect the main crucial of the economic growth. Determinants of FDI inflows Akhtar(2000) has conducted a study that FDI is the dependent variable and import, export and exchange rate is the independent variable .wang (2009) has observed that FDI and foreign direct investment of 12 Asian countries.Awan(2010) has shown the determinants of FDI and detected that inflation rate has a significant impact on the FDI inflows.shahzed et al (2012) impact of macroeconomic variables on the GDP, and growth rate
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