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Financing Inclusive Growth through FDI: Incorporating the Role of Institutional Quality

Author

Listed:
  • Muneza Munir

    (PhD scholar, Applied Economics Research Centre, University of Karachi, Karachi, Sindh, Pakistan.)

  • Ambreen Fatima

    (Associate Professor, Applied Economics Research Centre, University of Karachi, Karachi, Sindh, Pakistan.)

Abstract

Countries need a tremendous amount of investment to utilize existing resources and enhance productivity in order to ensure inclusive growth in the economy. Foreign Direct Investment (FDI) by providing the required investment can fulfil the saving-investment gap. The paper makes an empirical investigation of the effectiveness of FDI as a financing tool for inclusive growth. The study also examines how the effectiveness of FDI varies across economies with varying level of institutional quality. The results suggest that FDI plays a significant role in achieving inclusive growth, especially in economies with a low and medium level of institutional Quality. A deep underpinning of our inclusive growth variable brought thoughtful insights such as low and middle-income economies, which mostly belong to the low and medium level of institutional quality cluster. They should adopt policies that enhance the existing spectrum of opportunities. Whereas equity should be the top-most priority for high-income economies.

Suggested Citation

  • Muneza Munir & Ambreen Fatima, 2020. "Financing Inclusive Growth through FDI: Incorporating the Role of Institutional Quality," Global Economics Review, Humanity Only, vol. 5(2), pages 29-46, June.
    • Handle: RePEc:aaw:journl:v:5:y:2020:i:2:p:29-46
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    References listed on IDEAS

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    Cited by:

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    2. Wang, Wencheng & Ning, Zinan & Shu, Yang & Riti, Miriam-Kamah J. & Riti, Joshua Sunday, 2023. "ICT interaction with trade, FDI and financial inclusion on inclusive growth in top African nations ranked by ICT development," Telecommunications Policy, Elsevier, vol. 47(4).
    3. Ijaz Uddin & Muhammad Azam Khan & Muhammad Tariq, 2025. "Multidimensional Inclusive Growth and Determinants in Pakistan: Do Foreign Remittances and Institutional Quality Matter?," Journal of South Asian Development, , vol. 20(3), pages 395-427, December.
    4. Ijeoma Christina Onuogu & Abubakar Hassan & Seyi Saint Akadiri & Abdulwahab Ahmad Bello & Joshua Sunday Riti, 2026. "Impacts of ICT diffusion, foreign direct investment, trade openness, and globalization on growth in Sub‐Saharan Africa," Natural Resources Forum, Blackwell Publishing, vol. 50(1), pages 247-274, February.

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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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