Factors influencing FDI in the Pakistan Telecom sector

Abstract: Foreign Direct investment is a massive source of investment in Pakistan telecom sector and is growing gradually due to its potential market. The objectives of my research are: • Investigate and analyze the factors which are considered most important for the inflow of FDI in Pakistan telecom sector. • Find out what kind of relationship exists between FDI and the influencing factors (political instability, Rules and Regulations and fluctuation in economic growth). Quantitative approach has been employed during this research study for the analysis of influencing factors on inflow of FDI. During my research, I relied on secondary data that is available in the form of official reports published by several departments of government of Pakistan and other international organizations. The main focus during this study was, however, kept on secondary data. I have analyzed the inflow of FDI in telecom sector of Pakistan and identified the most important factors influencing this inflow to loose or enhance the confidence of the investors. Moreover, I have compared the FDI in telecom and other sectors of Pakistan and have found out that Pakistan telecom is a prominent sector which is able to attract massive amount of FDI since the last couple of years. The Pakistan Telecom sector has more potential to attract FDI but the factors such as political instability and fluctuation in economic growth are considered as a focal point by investors before moving in the host country. In order to promote the FDI, Pakistan needs to: 1. Stabilize the political situation. 2. Improve rules and regulations of the telecom sector 3. Improve law and order situation 4. Strengthen the macro economic fundamental to minimize the fluctuation in economic growth