Higher income and trade openness boost FDI inflows in Pakistan!
The article examines what factors influence the amount of foreign investment coming into Pakistan. It looks at how the country's income, democracy level, and trade openness affect this. The study uses a method called dynamic PMG estimators and analyzes data from 24 countries over a 30-year period. The findings show that higher income in both Pakistan and the investing countries, as well as more open trade policies, lead to more foreign investment in Pakistan. However, good institutional quality only attracts foreign investment in the short term.