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The purpose of this study is to find out the impact of Terrorism on FDI inflow in Pakistan as
well as other variables such as economic growth, market size, trade openness and
infrastructure. Using a simple regression model to estimate time series, annual data from
2001 to 2016, the study concludes that market size, economic growth, and trade openness have
a significant positive relationship with FDI. At the same time, the result shows that Terrorism
and infrastructure has a significant negative relationship with FDI. This empirically builds up
the way that Terrorism is a real threat to FDI and economic development of the economies of
Pakistan. The empirical outcomes of the study of Terrorism confirmed the way that Terrorism
based oppression has harmed the economic prosperity of Pakistan and has debilitated FDI
inflows during the sample period. Therefore, Pakistan will take to measures the investment
environment in this area. Government strategy makers should consider the situation of
Terrorism, instability and lawfulness circumstance to decrease the risk of investors and to
ensure their investment ability to host FDI.
Asad Ullah, Asfandyar Rahim, Mohammad Daud Ali, Shah Raza Khan, Syed Arshad Ali Shah. (2020) Impact of Terrorism on Foreign Direct Investment: An Empirical Analysis of Pakistan, Journal of Independent Studies and Research-Management, Social Sciences and Economics, Volume-18, Issue-1.
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