Role of Governance in Attracting Foreign Direct Investment Inflow: Empirical Evidence from South Asia Region

The study, conducted by Mosab I. Tabash, Umar Farooq, Ali Matar, and Mujeeb Saif Mohsen Al-Absy, explores the impact of governance quality on foreign direct investment (FDI) inflow in South Asian economies.

Why FDI Matters

Foreign direct investment plays a crucial role in economic growth, job creation, and technology transfer. Understanding the factors that attract FDI is vital for policymakers and investors. This study specifically focuses on the governance quality of host countries and its influence on FDI inflow.

Research Methodology

By analyzing financial statistics from eight South Asian economies over a 20-year period (2000–2019), the researchers employed FMOLS and DOLS models to estimate the long-term coefficients.

The empirical analysis discloses the positive significant role of the aggregate governance index on FDI inflow, implying that better governance can uplift the inflow of FDI.

Key Findings

Policy Recommendations

The study’s recommendations highlight the importance of focusing on improving governance to attract more FDI. Enhancing governance standards, such as political stability and reducing corruption, can contribute to economic growth and regional development. The findings of this study have broader policy implications for developing economies worldwide.

Foreign direct investment plays a crucial role in the economic development of nations, and understanding the factors that attract FDI is vital for policymakers and investors. This study provides valuable insights into the relationship between governance and FDI inflow, shedding light on the significance of governance quality in shaping investment patterns.

Publication Details

The research article was published in Cogent Economics & Finance. It is indexed by Scopus (Citation Metrics, 1.9 & Impact Factor, 2.3). Further, the journal is indexed by Emerging Sources Citation Index and other metrics.

For more details and a comprehensive understanding of the study, you can access the full article through the provided DOI link: DOI: 10.1080/23322039.2024.2358930.