Do Corruption and Trade Openness Impede FDI?

Authors

  • Waqar Ali Ather Bukhari Lecturer, Deparment of Economics, Bacha Khan University, Pakistan
  • Azaz Ali Ather Bukhari Lecturer, University of Punjab, Gujranwala Campus, Pakistan
  • Noreen Khalid
  • Qasim Raza Syed Assistant Director, National tariff commission Pakistan, Pakistan qasimrazasyed.economics@gmail.co

Abstract

Foreign direct investment (FDI) has been given much attention
in the recent past just because of its contribution to economic
development. However, there are several socio-economic
factors that impede FDI. Therefore, the objective of current
study is to probe whether corruption and trade openness affect
FDI. The study uses data from 1990-2015 for SAARC countries
and employs panel ARDL model to retrieve short- and long-run
results. The findings reveal that corruption plunges the FDI in
long-run, while trade openness increases FDI. On the contrary,
we report heterogeneous results in short-run. Additionally, we
deduce a few policy implications based on the findings of this
study.

Author Biography

Azaz Ali Ather Bukhari, Lecturer, University of Punjab, Gujranwala Campus, Pakistan

 

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Published

2021-01-27