DETERMINANTS OF FOREIGN DIRECT INVESTMENT INFLOWS: EVIDENCE FROM A PANEL ANALYSIS OF SOUTH ASIAN COUNTRIES
DETERMINANTS OF FOREIGN DIRECT INVESTMENT INFLOWS: EVIDENCE FROM A PANEL ANALYSIS OF SOUTH ASIAN COUNTRIES

Summary/Abstract: The aim of this study is to examine the variables that derive FDI inflows in five major countries of South Asia. The results from the past empirical studies about this subject matter have been controversial, which has created a gap in the literature. Data was collected from the United Nations Conference on Trade and Development and World Bank Indicator from 1990 to 2017, and various Panel Techniques were estimated to simultaneously address the objective of this study and counter heterogeneity problem associated with cross countries analysis. Consequently, the findings that originated from this work established the following among others; the prominent variables that determine the inflows of FDI in South Asia are the market size and GDP per capita. However, growth rate of these economies are identified as a factor that could discourage the inflows of cross border investment in this region. Furthermore, as result of these important findings, this paper makes the following recommendations. The policy makers in South Asia should embark on further policy measures that will expand the market size and GDP per capita in this region. Also the policy makers in South Asia should implement policies that will boost competitive growth rate in the individual country.

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