Do Uncertainty and Financial Development Influence the FDI Inflow of a Developing Nation? A Time Series ARDL Approach
The study focuses on investigating the long-term and the short-term effect of uncertainty, and financial development on the FDI inflow of Pakistan during the period 2001–2019. To achieve the objective of this study, we obtained the data from World Development Indicators (WDI) and the European policy...
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| Veröffentlicht in: | Sustainability 2022-10, Vol.14 (19), p.12609 |
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| creator | Lutfi, Abdalwali Ashraf, Maryam Watto, Waqas Ahmad Alrawad, Mahmaod |
| description | The study focuses on investigating the long-term and the short-term effect of uncertainty, and financial development on the FDI inflow of Pakistan during the period 2001–2019. To achieve the objective of this study, we obtained the data from World Development Indicators (WDI) and the European policy uncertainty index’s websites. The dependent variable was FDI inflow. Experimental variables of the study are uncertainty and financial development. The stationarity testing revealed that FDI and Economic Policy Uncertainty (EUP) have weak significance and FD has no significance. However, by taking the first difference, all the variables become highly significant. Similarly, it is further indicated that the optimal lag level is four. Additionally, the bound test confirmed that a long-term relationship (co-integration) existed between the variables of the study. The ARDL estimations conclude that uncertainty and financial development have long-run as well as short-run effects on FDI inflow for Pakistan during the period of study. The uncertainty plays a strong part in decreasing the FDI inflow, whereas financial development plays a strong part in enhancing the FDI inflow in Pakistan during the period of study. |
| doi_str_mv | 10.3390/su141912609 |
| format | Article |
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A Time Series ARDL Approach</title><source>Elektronische Zeitschriftenbibliothek - Frei zugängliche E-Journals</source><source>MDPI - Multidisciplinary Digital Publishing Institute</source><creator>Lutfi, Abdalwali ; Ashraf, Maryam ; Watto, Waqas Ahmad ; Alrawad, Mahmaod</creator><creatorcontrib>Lutfi, Abdalwali ; Ashraf, Maryam ; Watto, Waqas Ahmad ; Alrawad, Mahmaod</creatorcontrib><description>The study focuses on investigating the long-term and the short-term effect of uncertainty, and financial development on the FDI inflow of Pakistan during the period 2001–2019. To achieve the objective of this study, we obtained the data from World Development Indicators (WDI) and the European policy uncertainty index’s websites. The dependent variable was FDI inflow. Experimental variables of the study are uncertainty and financial development. The stationarity testing revealed that FDI and Economic Policy Uncertainty (EUP) have weak significance and FD has no significance. However, by taking the first difference, all the variables become highly significant. Similarly, it is further indicated that the optimal lag level is four. Additionally, the bound test confirmed that a long-term relationship (co-integration) existed between the variables of the study. The ARDL estimations conclude that uncertainty and financial development have long-run as well as short-run effects on FDI inflow for Pakistan during the period of study. 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| subjects | Autoregression (Statistics) Dependent variables Developing countries Economic aspects Economic development Economic growth Economic policy Forecasts and trends Foreign investments Growth models Hypotheses Inflow Investments LDCs Sustainability Time series Trends Uncertainty Websites |
| title | Do Uncertainty and Financial Development Influence the FDI Inflow of a Developing Nation? A Time Series ARDL Approach |
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