Relationship of Government Regulations with FDI in

Pakistan

Introduction:
Pakistans economy continues to face numerous domestic and external shocks
from 2007 onwards. Economic performance was affected by devastating floods
and rains, internal security hazards, and the energy crisis. The economy over the
last five years grew on average at the rate of 2.9% per annum. In spite of dire
scenarios, the economy stays afloat by continuing remittances from abroad,
massive informal economy and consumption-oriented society.
Pakistan had also recently undergone its general election. Two elected
governments impose solidarity in business and policy continuity. Domestic and
foreign investment will gain confidence to initiate new business activities on a
peaceful democratic transition that aims to increase production, employment and
stability in the economy.
I am conducting study on relationship of government regulations on FDI in Pakistan.
My study is based on last 5 years data of government regulations such as exchange
rates, interest rates FDI inflow in Pakistan, incentives given by government to foreign
investors, tariff and duties imposed by government on trade. Purpose of my study is
how much these factors effect inflow of FDI in Pakistan and related factors that also
effect FDI inflows. Increase and decrease in regulations how much affect the inflow
and outflow of FDI in last 5 years.

Problem statement:

I conduct this study to analyze the effects of investment regulations on FDI in

Pakistan. When government increase or decrease the rate of investment regulations on
foreign direct investment how much rate of FDI inflow and outflow are fluctuate due
to this. So for this first of all we discuses our variables.

What is FDI?

Foreign direct investment means an individual, a group of individuals, an

incorporated or unincorporated entity or a public or private company investing its
money in other country. Increasing FDI is usually used as one of the indicators of
growing economy as Pakistan had received more than five billion dollars in 2007 and
was aspiring to becoming a Asian Tiger Foreign direct investment usually involves,
transfer of technology and expertise. FDI may provide new capital, allowing
additional investment in both human and physical capital, which can be very
beneficial for (developing) countries with liquidity constraints.1 In contrast to short-

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 term capital flows, long-term foreign investment is much more likely to be valuable
to host economies, in particular if the investment takes the form of new or expanding
production plants.
Moreover, foreign investment inflows are generally accepted as a means to
incorporate new knowledge from abroad. The theory of the multinational firm
proposes that multinational corporations have a technological advantage over local
firms that outweighs the cost of doing business in external markets (Caves 1996,
Markusen 2002). The inflow of new knowledge may benefit domestic firms through
imitation and learning (Findlay 1978, Mansfield and Romeo 1980, Blomstrm 1986),
increasing competition in local markets, facilitating human capital mobility among
firms (Fosfuri et al. 2001, Glass and Saggi 2002) and vertical linkages (Rodrguez-
Clare 1996, Markusen and Venables 1999), thereby increasing the productivity level
and sustaining a higher growth rate.

Objectives of study:
To measure the foreign direct investment and ratio of foreign and domestic
investors.

Institutional and regulatory mechanisms to regulate markets and prevent

unhealthy speculators and fluctuations.

To examine the relationship between FDI and inflation.

To investigate the impact of FDI on GDP per capita.

To analyze the impact of tax rate on FDI level.

To explain the relationship between FDI and gross capital formation.

Questions of study:
What is foreign direct investment and the ratio of foreign investors in
Pakistan?

What is the institutional and regulatory mechanisms for regulate markets and
for preventing unhealthy speculators and fluctuations?

What is the relationship of FDI and inflation?

What is the impact of FDI on GDP per capita?

How tax rates affect in FDI?

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 What is the relationship between FDI and gross capital formation?

Variables:

a. Dependent Variable: FDI

b. Independent variable: Government Regulations, interest rates, exchange rates,
tariff and duties, incentives.

Investment regulations:
Regarding the intensity of regulations, it could be expected that regulations hinder
countries from taking advantage of higher FDI inflows, but this might apply only for
countries with relatively restrictive regulations. Throughout the world, governments
engage in social and economic regulation of their citizens lives. Economic
regulation, in particular, has come into focus during the past decade, mainly because
such regulation has been associated with falling productivity rates in many
industrialized countries. But social regulation by government also is being discussed
when drug abuse legislation, censorship of pornography, and similar matters are
considered. Most types of government regulation involve the setting up and
enforcement of standards for conducting legitimate activities. My concern here is
with government regulation of business or economic affairs by municipal, county,
state, and Federal politicians and bureaucrats.

Tariff and Taxis:

Tariffs taxis are imposed by the government when government wants to control the
inflow of FDI in their country. Government charge extra taxis and tariffs on imports.
When a country wants FDI inflow in their country they give subsidies to foreign
investors for investment in their country. Tax is classified into two main categories that
is direct and indirect taxation. Direct tax is imposed on properties, incomes and
corporate profits etc. Indirect tax includes value added tax, sales tax and import duty
etc. In case of direct taxes, tax revenue depends on a countrys policy, either it relaxes
the direct taxes for attracting foreign investment or imposes to collect revenue. For
example, tax holidays and tax credits for new foreign investment and exemption of
import duty in case of imports of raw material and machinery. Secondly, indirect tax
depends on the sales of goods and services. FDI has generally positive effect on the
economic growth and income levels in a country, so there will be greater aggregate
demand and economic activities in a country which could help the government to
generate more indirect taxes. In case of Pakistan, major proportion of tax revenue is

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collected through indirect taxes. So, FDI may have positive impact on the tax revenue
in Pakistan. Caves (1971) claimed that foreign investment had a positive impact of
welfare through collection of corporate income taxes. FDI could increase general
welfare in the host country through increase in the tax revenue. The welfare decreases
when a country offers relaxation in the tax for foreign investment or if there had been a
transfer pricing from foreign firms to their mother countries (Kopits 1976). Markusen
(1984) claimed that welfare effect of FDI was uncertain. Foreign investment enlarged
welfare through an increase in competition and tax on their profits and reduced welfare
through transfer of profits earned by local enterprises to the foreign enterprises. Non-
tariff barrier to trade includes, import quotas, special licenses, unreasonable standards
for the quality of goods, export restrictions, technical barriers to trade, rules of origin
and export subsidies. These measurements create a lot of trouble regarding the
investment opportunities and trade barriers and create potential threats for the
domestic as well as foreign investors. As for as Pakistan is concerned which is agro-
based country, and less industrial country, currently facing the problems regarding the
investment opportunities. Non-tariff barrier includes other than tariffs to protect the
domestic investors and by imposing the levy taxes to on goods and services to
discourage the imports. In Pakistan non tariff barriers is because of lack of
information, lack of sufficient banking dealings and visa restrictions.

Duties:

Duties are imposed on imports when investors see that duties are high on imports they
did not want to invest in that country because they can not gain high profits due to
this. Government give them relaxcesion on imports when government wants that
foreign investment come in the country. Since the early 1980s, there has been a
widespread trend towards liberalization of national laws and regulations relating to
foreign investment, especially in developing and transition countries. However,
unilateral action has not been found sufficient as regards either the locking-in of
reforms and their credibility in the eyes of investors, or the compatibility with other
FDI regimes. In the absence of a multilateral regime, the liberalization of national
FDI regimes has been accompanied by a rapid proliferation of intergovernmental
arrangements dealing with foreign investment issues at the bilateral, regional (for
example, NAFTA and MERCOSUR) and plurilateral levels. Some two-thirds of the
nearly 1,160 bilateral investment treaties concluded up to June 1996 were signed
during the 1990s. In addition, OECD members - which currently account for about
85 per cent of world outflows of FDI - have been negotiating since May 1995, with
the aim of concluding a Multilateral Agreement on Investment (MAI) in 1997. The

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objective is an independent international treaty, open to OECD members and the
European Community and to accession by non-OECD countries.

The WTO also has FDI-related rules:

While the original GATT rules put obligations on governments only in respect of the
treatment of foreign goods, the WTO - through the GATS and the TRIPS Agreement,
as well as the plurilateral Government Procurement Agreement - places important
obligations on governments with respect to the treatment of foreign nationals or
companies within their territories. Through the inclusion of rules on commercial
presence (defined as any type of business or professional establishment), the GATS
recognizes that FDI is a prerequisite for exporting many services. The TRIMs
Agreement provides for a review within five years, in the context of which
consideration will be given to whether the Agreement should be complemented with
provisions on investment policy and competition policy. The Agreement on Subsidies
and Countervailing Measures defines as subsidies some types of measures in each of
the three main categories of FDI incentives (fiscal incentives, financial incentives and
indirect incentives). WTO members are considering, in the context of preparations for
the WTO Ministerial Meeting to be held in Singapore in December 1996, a proposal
for the establishment of a work program on trade and investment aimed at clarifying
the issues in this area.

Policy considerations:

The WTO's investment-related rules are binding, as are the rules in nearly all the
bilateral, regional and plurilateral agreements. In contrast, the various multilateral
FDI instruments, none of which is comprehensive, are by and large non-binding.
More generally, one of the striking characteristics of the present pattern of multi-
layered investment rules is the diversity of approaches and legal architectures. A key
consideration at the present juncture, therefore, is that of current and future policy
coherence. Governments face a choice between continuing to deal with FDI issues
bilaterally or in small groups, supplemented by a patchwork of rules in the WTO, and
exploring options for a comprehensive framework designed to ensure that investment
and trade rules are compatible and mutually supportive. There is little doubt that
investors have a strong preference for the second option.

Exchange rates:
Exchange rates fluctuation in external currency markets affect Pakistani rupee as it is
not internationally traded stable currency. Foreign loans are contracted in foreign
currencies and converted into local for disbursement. Pakistan buys and sells foreign
currency via US Dollar. Receipt and repayment of foreign debt necessitates other
currencies exposure in two ways; US Dollar/other foreign currencies and Pak

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Rupee/US Dollar. This two dimensional exchange rate augments stock of External
Debt Liabilities (EDL) during this study period in contrast to actual inflows of debts.
In March, 2014 total 95% external debt contracted in major currencies and US Dollar
depreciate against that currencies augmented foreign currency component (of public
debt) by US$ 275 million. A comprehensive foreign exchange risk management
requires implementing prudent foreign exchange policy with controlled procedures of
public and private stake-holders. Currency movements analyzed for the last 32 years
revealed rise in services cost of foreign debt 1.7% higher than average domestic
interest rates. It would lower if government adopted alternative policies such as
currency hedging framework, controlled deficit in BOP and curtailed non
developmental expenditures by austerity measures. The study analyzed the
effectiveness of exchange rate on macroeconomic variables of Pakistan. The precise
objective of the study is to examine the causality between exchange rate, trade,
inflation, FDI and GDP through a series of models.

Interest Rates:
Government charge interest rate on FDI investment. Investors wants to invest those
countries where interest rates are high on investment. Tax is classified into two
main categories that is direct and indirect taxation. Direct tax is imposed on
properties, incomes and corporate profits etc. Indirect tax includes value added tax,
sales tax and import duty etc. In case of direct taxes, tax revenue depends on a
countrys policy, either it relaxes the direct taxes for attracting foreign investment or
imposes to collect revenue. According to Bond and Samuelson (1986), host
countries could lose some tax revenue in short run if tax holidays were given to
attract FDI in early period. Tax revenue could increase in the long run because
foreign investment would not pull out after that tax holiday period. Brander and
Spencer (1987) stated that host countries could attract FDI by imposing tariff on
imports and relaxing the tax on local production. It was stated that FDI could
enhance national welfare by reducing unemployment, rising productivity through
technology transfers and raising government revenue through taxation. Interest rate
has a more direct effect on financial market, an increase in interest rate leads
investing decisions to make a change in the structure of investment, generally from
capital market to fixed income securities. Variability in interest rates directly
generates a momentum to the money market from capital market.

Registration process:
Registration process of FDI businesses are very complicated and long thats why
investors not feel good due to long time period and process. If government wants FDI
then they complete this procedure immediately. First when you register a company
with foreign director there is a security clearance of each foreign director from
Ministry of Interior. The process is same as for normal company but when we submit

6
documents for company registration with Securities and Exchange Commission of
Pakistan certain additional documents are submitted along with normal documents for
company registration. These are related to the foreign shareholder and director of the
company. The Securities and Exchange Commission of Pakistan then forward these
documents to the Interior Ministry of Pakistan. The Interior Ministry of Pakistan as
per their own procedures perform security check.
The company meanwhile is allowed to be register but subject to affidavit from the
foreign director that if the Security clearance is not provided to the foreign director
then such director will immediately resign and transfer his shares to another person.
Registration of company with foreign directors is little tricky as with our years of
experience there are certain things that if done rightly could save your time and
problems. Therefore if you need any professional advice or wanted to hire services
for registration of company with foreign directors we have the required skills and
experience.

Incentives:

Financial incentives, involving the provision of funds directly to the foreign

investor by the host government, for example, in the form of investment
grants and subsidized credit.
Fiscal incentives, designed to reduce the overall tax burden for a foreign
investor. To this category belong such items as tax holidays, and exemptions
from import duties on raw materials, intermediate inputs and capital goods.
Indirect incentives, designed to enhance the profitability of a FDI in various
indirect ways. For example, the government may provide land and designated
infrastructure at less-than-commercial prices. Or it may grant the foreign firm
a privileged market position, in the form of preferential access to government
contracts, a monopoly position, a closing of the market for further entry,
protection from import competition or special regulatory treatment.

Literature Review:

There are many studies on the foreign direct investment and economic growth that has
been Conducted by various scholars few were done locally and major were
internationally. Pakistan was one of those countries where empirical studies has been
reviewed critically the Purpose of those researches was to evaluate most critical
consequences and policy Recommendations by Falki (2009) foreign direct
investment had a statistically destructive Result on the gross domestic product.
Khondoker and Kaliappa (2010) reported that countries with larger GDPs, higher
GDP growth rates, higher proportion of international trade and a more business-
friendly environment are more successful in attracting FDI.

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 Sufiyan and Moise (2010) concludes that, countries that are receiving fewer foreign
investments could make themselves more attractive to potential foreign investors. So,
the policy makers in the MENA region should remove all barriers to trade, develop
their financial system.. Many investment regulations are also affect FDI such as tariff,
taxes, duties, interest rates, registration process etc. Javed (2012) examined
relationship among three variables FDI, trade and economic growth in four Asian
countries (India, Sri Lanka Pakistan and Bangladesh) analyzed annual data for 1973
to 2010. "Generalized Method of Moments" (GMM) used for computation of
regressions result showed FDI mix impacts on development of economic growth in
that economies, positive relation of growth, trade and FDI. FDI should be encouraged
to strengthen economic growth, to lift up living standards to restrain poverty and
unemployment to amplify benefit of innovative technology, but we must not forget to
give proper attention should also be paid to maintain pro to and to prevent people
from the monopolies of the multinational _armband to save sovereignty of the
country. In order to enhance growth, policies should device to attract export oriented
FDI instead of domestic demand oriented.
Regulatory laws are important for economic growth and investment. Investment is the
process through which capital stock of an economy increases. Investment is more
important for economic growth. The policy makers and financial analyst try to
reformulate their policies through the investment in human capital, physical
infrastructure that leads to the economic growth. There are two channels of
investment that brings a good economic system and promotion of the investment.
Regulatory laws are important for economic growth and investment. Investment is the
process through which capital stock of an economy increases. Investment is more
important for economic growth. The policy makers and financial analyst try to
reformulate their policies through the investment in human capital, physical
infrastructure that leads to the economic growth. There are two channels of
investment that brings a good economic system and promotion of the investment
technique of co integration concluded that there exists a long-run relationship
between exchange rate and relative prices, income and interest rate. Aftab and
Aurangzeb (2002) investigated the long-run and short-run impact of exchange rate
devaluation on Pakistan's trade performance. They used the Johansen's co-integration
technique to investigate the long-run trade elasticitys and the presence of Marshall-
Lerner (ML) condition. They also investigated the short-run exchange rate dynamics
by constructing an error-correction model to trace the J-curve. For the quarterly data
for time period 1998-2000, the study reaffirmed the satisfaction of the ML condition
in the long run for Pakistan. The results showed that there was the existence of j-
curve phenomenon in the country. The results indicated that the real depreciation of
Pak-rupee may be used as a policy tool to improve the trade balance.

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 Theoretical Framework:

Tariff

Taxes

Interest rate FDI

Subsidies

Exchange
rates

Excise
Duties

Hypothesis:

H0; FDI is not affected by Government regulations.

H1; Tariff affect negatively FDI.
H2; Duties negatively affect FDI.
H3; Interest rates negatively affect FDI.
H4; Subsidies have a positive impact on FDI.
H5; Exchange rates have direct relationship with FDI.
H6; Taxes affect directly FDI.

Research methodology:

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 The main objective of this study is to explore the links between exchange rate, interest
rates, tariff and duties, incentives given by the government to foreign investors with
FDI in Pakistan. We used the annual time series data for the years 2010-2015 The data
has been taken from Economic Survey of Pakistan, Federal Bureau of Statistics and
World Bank. Most of the economic variables exhibit a non stationary trend. We
checked the stationary of data, otherwise ordinary least square may generate spurious
results. We used SPSS for computing our hypothesis through regression analysis.
a) Population:
Population of this study is organizations and companies works in Pakistan owned by
foreign investors.
b) Sample, Sampling Technique and Sampling Procedure:
Samples of this study are interest rates, exchange rates, FDI, tariffs and duties,
incentives given by the government to foreign investors, registration process. We get
above samples of investment regulations from the economic survey of Pakistan, federal
bureau of statistics and world bank. Population of this study is organizations owned by
foreign investors.
c) Measurement of Variables:
We measure the variables frequencies, regression, histogram, beta factor, r 2 and auto
correlation through SPSS.
c) Data collection Method and Procedure:
Data for this research is collected from economic survey of Pakistan, federal bureau of
statistics and from state bank of Pakistan. Data type is secondary data and we collect data
of previous 5 years 2010-2015.
d) Data Analysis Tools and Techniques:
Data analysis tools is SPSS and we analyze data through measuring frequencies,
regression, histogram, beta factor, r2 and auto correlation of variables.

Results and Discussion:

Execute regression to shows the research results of relationship of government regulations
with FDI in Pakistan. The basic reasons for the inward foreign direct investment are to
implement the good laws and good governance that leads to the promotion of foreign
direct investment and economic growth. The good governance and the strong laws; like
common laws which yields the good financial health of the country. The risk factor also
involves towards the investment decisions and the political instability also the factor,
which creates a hurdle towards the domestic as well as foreign investment (Byrne, 2001;
Queensland Government Public works, 2002).

We have simply used the (SPSS) to check the significance according to the law. We have
not used the GMM-Estimator because we are unable to find the correct data for the
Pakistan. However, to some certain extent; we have used the basic laws and their role in
domestic as well as the foreign direct investment for Pakistan.

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 ANOVAa

Model Sum of Squares df Mean Square F Sig.

Regression 546142.349 4 136535.587 .611 .730b

1 Residual 223431.544 1 223431.544

Total 769573.893 5

a. Dependent Variable: FDI

b. Predictors: (Constant), TARIFF, INTERESTRATES, TAXRATE, EXCHANGERATES

Regression shows that 1% change in government regulations brings .730%

change in FDI inflow in Pakistan. This represents fairly weak but positive
relationship between government regulations and FDI. Probability of this
correlation coefficient occurring by chance alone is less 0.05%. This correlation
coefficient is therefore statistically significant.

Model Summaryb

Model R R Square Adjusted R Square Std. Error of the

Estimate

1 .842a .710 -.452 472.68546

a. Predictors: (Constant), TARIFF, INTERESTRATES, TAXRATE, EXCHANGERATES

b. Dependent Variable: FDI

The coefficient of determination can take on any value between 0 and +1. It
measure the proportion of the variation in a dependent variable than can be
explained statistically by the independent variables. r2 is 0.710 that shows
positive correlation and it explained by the investment regulations. Negative
value of r2 represents negative correlation between variables. Variation is in
data so we have coefficient is 0.710.

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 Coefficientsa

Model Unstandardized Coefficients Standardized t Sig.

Coefficients

B Std. Error Beta

(Constant) 5884.911 13637.495 .432 .741

TAXRATE 296.655 779.292 .633 .381 .768

1 EXCHANGERATES -89.145 114.368 -1.991 -.779 .579

INTERESTRATES -441.410 557.259 -2.491 -.792 .574

TARIFF -12.475 192.002 -.081 -.065 .959

a. Dependent Variable: FDI

Regression analysis can also be used to predict the value of a dependent variable given
the value of one or more independent variables by calculating regression. Beta of tax
rates is 0.633, exchange rates is -1.991, interest rates is -2.491 and tariff rates is -0.081. t
value is less than 1.99 that shows std. Error in data very high.

Residuals Statisticsa

Minimum Maximum Mean Std. Deviation N

Predicted Value 2298.2268 3127.0847 2623.9333 330.49731 6

Residual -205.30852 376.35684 .00000 211.39136 6

Std. Predicted
-.986 1.522 .000 1.000 6
Value

Std. Residual -.434 .796 .000 .447 6

a. Dependent Variable: FDI

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 Descriptive Statistics

N Minimum Maximum Mean Std. Deviation Skewness Kurtosis

Statistic Statistic Statistic Statistic Statistic Statistic Std. Error Statistic Std. Error

TAXRATE 6 33.00 35.00 34.5000 .83666 -1.537 .845 1.429 1.741

EXCHANGERA
6 85.75 106.30 97.8083 8.76279 -.614 .845 -1.828 1.741
TES

INTERESTRAT
6 7.50 13.50 10.5000 2.21359 .000 .845 -1.173 1.741
ES

FDI 6 2099.10 3184.30 2623.9333 392.31974 -.008 .845 -.555 1.741

TARIFF 6 9.00 16.00 11.3500 2.55323 1.445 .845 2.168 1.741

Valid N
6
(listwise)

Skewness and kurtosis standard bench mark is 3 to -3 and the values we get from our
research are between 3 and -3 so these values shows a significant relationship between
variables.

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Histogram shows distribution of data in this study distribution of data is not as normal as
we expect it because the data of this study is change over the months and because of large
data month vise we did not approach easily thats why this distribution is looking not
much normal.

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Regression line shows a linear distribution of data in study. So we can say that there is a
linear relationship between the dependent and independent variables.

Discussion :

Pakistan was basically an agricultural economy upon its independence in 1947. Its
industrial capacity was negligible for processing locally produced agricultural raw material.
In order to overcome this problem, however different types of industrial policies have been
implemented in different times with their focus on either the private sector or the public
sector. First of all, the stronger efforts are to be made to attract as much FDI as possible.
The Macroeconomic stability plays a key role in boosting economic growth (Kim, 1993)
and restoring foreign investors confidence on the economy. Inconsistent economic policies
discourage foreign investors in undertaking projects of medium to long-run duration. By
introducing the facilities for FDI it will help to encourage foreign investors to come and
invest in Pakistan.

FDI may provide better access to technologies for the local economy, so we must offer free
trade for encouraging the FDI. But this free trade must be properly managed so that it does
not able to discourage our local investors. The dependence theory suggests that FDI can
produce adverse impact on growth and income because FDI has the opportunities to create
the monopolies in the country (Chase and Bornschier 1985). In booming economies its not
easy for the foreign direct investors to force out the local business. So at that situation FDI
gives more positive impact on the economy. But in fluctuating economy government has to
use proper plans to protect local business. Pakistan policy makers should support the
export-oriented FDI into country. Pakistan needs to provide the attractive packages for high
tech companies to invest in the county. High tech companies production in Pakistan can
facilitate them exports to others neighboring countries. Exports oriented FDI will bring to
country lot of benefits such as new opportunity for jobs, latest technology, and
enhancement of the human capital, super Knowledge management, stronger the exchange
rate and improvement of the balance of payments in the country. Pakistan policy makers
dont have to neglect the business environment issues such as inflation, infrastructure,
interest rate, energy while developing the policies related to FDI inflows of Pakistan.
Political stability is the most influencing factor on macroeconomic variables

Conclusion:

In this study an empirical investigation was made to find out the impact of tariff and duties,
interest rate and exchange rate on FDI inflows of Pakistan. On the basis of the statistical
examination of the data it was concluded that there exist a significant relationship of
exchange rate and Interest Rate with Foreign Direct Investment Inflows of Pakistan. While
insignificant relationship of interest rate and Exchange rate was found with Foreign Direct
Investment Inflows of Pakistan. To test the hypothesis of this study Granger Causality test

15
was employed. While ADF is employed to check the stationary of the data. The results of
the study imply that some of the hypothesis is supported. In particular, the hypothesis H1
did not supported and H2, H3, H4, H5, H6 is supported significantly with FDI inflows in
Pakistan. The results finding shows that growth of GDP is the good sign as it attract the
foreign investor to invest in the concerned country. The GDP growth rate is also very
important determinant for the FDI. The purpose of this research was to determine the
impact of interest rates, exchange rates, tariffs and duties on FDI inflows in Pakistan. The
Granger Causality results rejected the null hypothesis of FDI do not affected by
government regulations which conclude that government regulations do have a significant
impact on the FDI inflows of Pakistan and it rejects the null hypothesis. So we can say that
investment regulations have a large impact on FDI inflow in Pakistan and any increase in
regulations causes outflow of FDI.

Table of content:

1) Introduction
2) Problem statement
3) Objectives of study
4) Questions of study
5) Variables
6) Investment regulations
7) Tariff and Taxis
8) Duties
9) Interest Rates
10) Exchange rates
11) Registration process
12) Incentives
13) Literature Review
14) Theoretical Framework
15) Hypothesis
16) Research methodology
17) Results and Discussion
18) Conclusion

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