Impact on the performance of Foreign Direct Investment (FDI) in Telecom Sector of Pakistan

Abstract

The purpose of this research study is to examine the factors that contribute positive impact on Foreign Direct Investment (FDI), the performance of FDI, determinative effects on FDI, constraints that reduces the FDI, and how can be again enhance the FDI in Telecom Sector of Pakistan. In this research study FDI in telecom sector of Pakistan taken as dependent variable and Market size, Competition, Literacy Rate, Foreign Trade, and Per Capita Income are taken as Independent Variable. In this study secondary data is used. For the aim of investigation time series data has been selected (2001Q1-2011Q4) on quarterly basis. To check and analyze the dependent and independent variables relationship and changing trend between dependent and independent variables, the Regression Analysis is applied, and also other statistical tool like Augmented Dickey Fuller (ADF) Test is used in this research study. This study shows that all independent variables have real strong affect and are acting crucial role in an enhancing the FDI in telecom sector of Pakistan. In order to attract Foreign Direct Investment (FDI) in Telecom Sector of Pakistan, Government of Pakistan should provide a conducive environment for foreign investors so as they improve the economic and security conditions of the country, restructure the political environment, control the terrorism, tax benefits, allow more 3G Licenses etc. to make this sector more competitive and attractive.