Exploring the Dynamics of Investment Inflow, Political Institutions, Trade, and Economic Growth: A Developing Countries Perspective (1971-2021)

Authors

  • Aurang Zaib School Education Department, Punjab, Pakistan.
  • Maham Rafique Bahauddin Zakariya University, Multan, Pakistan.
  • Jahanzaib Bahauddin Zakariya University, Multan, Pakistan.
  • Muhammad Ali Gardezi Institute of Southern Punjab, Multan, Pakistan.

DOI:

https://doi.org/10.52131/joe.2023.0502.0143

Keywords:

Foreign Direct Investment, Political Institutions, Trade, Economic Growth, Dynamic Fixed Effects

Abstract

This study delves into the impact of foreign direct investment inflows, political institutions, trade openness, and economic growth within seven developing trade partner nations. Using panel data from 1996 to 2021 and a method called "dynamic fixed effects," our work shows interesting dynamics. FDI has emerged as a potent driver of economic growth with a positive influence. Surprisingly, this study revealed an inverse relationship between trade openness and economic growth. Notably, political institutions’ catalytic role in stimulating both trade and investment inflows further amplifies the economic growth trajectory. These findings provide policymakers with invaluable insights and offer a nuanced perspective on crafting effective sustainable development strategies.

Author Biographies

Aurang Zaib, School Education Department, Punjab, Pakistan.

Subject Specialist Economics

Maham Rafique, Bahauddin Zakariya University, Multan, Pakistan.

M. Phil Scholar, School of Economics

Jahanzaib, Bahauddin Zakariya University, Multan, Pakistan.

M. Phil Scholar, School of Economics

Muhammad Ali Gardezi, Institute of Southern Punjab, Multan, Pakistan.

Assistant Professor of Economics

Published

2023-06-30

How to Cite

Zaib, A. ., Rafique, M. ., Jahanzaib, & Gardezi, M. A. . (2023). Exploring the Dynamics of Investment Inflow, Political Institutions, Trade, and Economic Growth: A Developing Countries Perspective (1971-2021). IRASD Journal of Economics, 5(2), 520–531. https://doi.org/10.52131/joe.2023.0502.0143