Impact of Communication Infrastructure on FDI Inflows in Pakistan: Moderating Effect of Country Level Governance

Abstract

The literature revealed that Foreign Direct Investment has always been beneficial for the economy. For considering such benefits, the study was conducted to investigate the impact of communication infrastructure on FDI inflows. It further gauged the effect of country level governance commendation for the attraction of FDI inflows towards the economic modifications. Such modifications will bring positive impact on the improvements in daily life and economic prosperity of population. Further, the literature gives grounds that communication infrastructure as one of the subgroups of physical infrastructure in relation to FDI. Data for the study was collected for Pakistan from the open sources of the World Bank. Various econometric tests applied for time series data analysis like ADF for unit root for the Stationarity of data, ARDL, VECM for finding the results for the data analysis. Further, various diagnostic tests like autocorrelation and heteroscedasticity are also applied. The results show cointegration among the variables in both short run and long run. It is an indication for the policy makers to consider the significant of impact of communication infrastructure on the FDI inflows in Pakistan and the country level governance is a part of such impact.