Factors Affecting FDI From MNCSs In Pakistan

Foreign Direct Investment and Multinational Companies play a great and rising role in influencing world,both politically and economically.Public along with academic opinion has long been mired in an inconclusive debate as to whether these phenomena are useful things that should be encouraged or harmful things that need intensive governmental regulation.FDI is a homogeneous process while MNCs are homogeneous entities.The current economic crisis and pressure on to bailout,limited foreign investment due to peace and stability concerns,internal political situation and corruption issues are the various factors that are affecting the economy of Pakistan and most of all the exchange rates.Pakistan seek independence in 1947 since independence Pakistan is indulge into various challenges,economic,territorial,authoritarian,sectarians and religious.These factor plays vital role in Pakistan’s under development in all aspects,from political to social and economic.This leads us to answer these questions undertaken for this study which are.What are the potential factors that resist NMNCs to initiate a new venture?What are the inhibiting factors of FDI in Pakistan?Based on these questions these objectives were targeted which are.To discover out the lead’ing factors that effect FDI in Pakistan and to explore the challenges facing by NMNCs in Pakistan.The higher the FDI the higher the country economy will grow;exchanges rates have significantly impacted over the foreign investors decision to go global.Exchanges rates are also impacted by various factors,such as political,peace and stability,government economic policies.Pakistan has tremendous opportunity for FDI and the rule must deliver friendly and safe atmosphere to foreign investors thus that they gain sureness to savings here.To conduct this study an online survey was conducted and the results were analyzed through Smart PLS which is very popular method for finding relative importance analysis,in a field where the data have many indicators than observation.The relative importance analysis is a term which usually applied to a technique which is used for estimating the importance of predictive variables in a regression model.The result is informing of a score which will be ranked upon how significantly every construct influence the other.The study concluded with the finding that Political instability is the major barrier in term of Pakistan FDI and MNCs development.An unstable political situation makes the investor not to venture any business and the government and Pakistan nation as whole must reconsider their political approach to tackle with the very challenging economic situation and huge amount of foreign loans.