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Impact of Transport and Technological Infrastructure in Attracting FDI in Pakistan

Author

Listed:
  • Kashif Munir
  • Mehwish Iftikhar

Abstract

This study analyzes the long run and short-run impact of transportation and technological infrastructure in attracting FDI in Pakistan, while transportation infrastructure is disaggregated into roads, rail, and air transport, and technological infrastructure is disaggregated into telecommunication, oil, and power consumption. The study uses annual time series data of Pakistan from 1973 to 2018 and applies the ARDL bounds testing approach for analysis. Results show that all the indicators of infrastructure, i.e. roads, railways, air transport, telecommunication infrastructure, power and oil consumption, have a positive and statistically significant impact on FDI in the long run. Oil and power consumption shows a greater impact on FDI because foreign investors associate the country’s development with its energy consumption. Transport infrastructure needs more improvement and development to facilitate foreign investments in the country. Government, as well as the private sector, has to pay attention to improving infrastructure facilities not only to fetch more FDI but for the economic progress of the country. Investment in infrastructure is required to provide better and efficient transport and technological infrastructure to facilitate the production process.

Suggested Citation

  • Kashif Munir & Mehwish Iftikhar, 2021. "Impact of Transport and Technological Infrastructure in Attracting FDI in Pakistan," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 7, pages 93-106.
    • Handle: RePEc:bas:econst:y:2021:i:7:p:93-106
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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