THE ROLE OF INVESTMENT PROFILE, GOVERNMENT STABILITY AND MACROECONOMIC MANAGEMENT IN DETERMINING FPI

Muhammad Asif; Abdul Majid

Muhammad Asif Department of Management Sciences, Hazara University, Pakistan
Abdul Majid Department of Management Sciences, Hazara University, Pakistan

Keywords: Foreign Private Investment, Investment Profile, Government Stability, Exchange Rate

Abstract

The objective of this paper is to investigate the effects of investment profile, government stability and macroeconomic management indicators on foreign direct investment in Pakistan. The results of time series data from 1984 to 2013 showed that there is a significant impact of explanatory variables on foreign private investment. Our results show that the government stability and investment profile of the country and per capita gross domestic product encourage the inflow of foreign private investment while real exchange rate depreciation have an adverse relationship with foreign private investment. Our study suggests that the government and its institutions must investment profile of the country, ensure government stability and strengthen the macroeconomic management indicators to make visible improvements in attracting foreign private investment inflow in Pakistan.