Chapter No. 2 2. Literature review

Chapter No. 2

2.   Literature review

A study through Vachani (1995) estimated that it refers to how work is done by the bargaining power with regarding to one day time period.  Specially, international venture through skinny bargain situation may possibly come across them gradually additional weak to political danger.

Fortanier (1991) determined that It is through skill and tools and structural effect total national consumption (TNC) can affect the economics growth of host countries. This effect is the absolute positive or negative is a sincere argues research inquiry. Lessons that used industry level data relatively after that a macro data did not give up consistent result. So productivity and HDI is proportional relationship.

An effort is frequently prepared in the direction of detail the probability that economic, financial and industrial environment to support the foreign investor and helps the prediction of future investment it may be profit or loose (Howell 1998). Javed et al,( 2013) estimated that There are four types of foreign direct investment of Pakistan, resources seeking, market seeking, efficiency seeking and strategic seeking (Salman 2010). A reported that FDI is an essential source for developing Nations and FDI inflows of developing countries are connected with a extra increasing rate (vertical) of investment. A.Yol and Nagia (2009) estimated that is positive relationship between rate of exchange and FDI.GDP, import is the very significant factor that determines the FDI Akthar (2002). Ahmad and Shah (2002) found that fiscal policy and high profit that is main role to attracting the FDI in Pakistan. Asedue (2002) estimated that tax rate and quantity of openness are positive relationship of FDI.

Banga (2003) estimated that Public FDI supported to the different sector in the host nation and sometime FDI follow the management of the host country.  On the other hand it is very difficult to observe the statistical and what is effect of FDI on the specific policies. FDI related to empirical tested and find out the Government policies for the purpose of to the supporting of foreign investor in any economy.

Azam and Lukman (2008) estimated the relationship between FDI and variety of economic, social and political variables. This study explored the Style of FDI inflow into Pakistan. Regularly with the globalization, the FDI inflow into these countries better. The total world FDI inflow reached to USA Rs 183332400 million in 2007.that is based on secondary time series data.

Khan and Nwaz (2010) found that foreign investment is two possibilities to choose the host nation depending upon the trade policy of host nation. There are two broader categories of the policy stand for the export promotion and import promotion, in export promotion uses the low labor cost and low price of raw material. In the other hand extra profit and rent looking for achievement. FDI divided into two types, FDI inflow and FDI outflow. FDI inflow shows the direct investment in host nations or direct investment in abroad. FDI outflow signify the direct in abroad that is related to import commodities. There have been some studies FDI inflow and growth of economics is a investigation point,   but the FDI and economics growth has not been addressed specifically so exogenous and endogenous variable are suitable to analyze the long run economics growth for an economy for the reason of economics development Rinninta (2011).

Mather and Singh (2011) determine the main variable generally used are location or drag factors, like as the size of the market, and push factors, relating to situation in the source country. The aggregate analysis does not point out FDI diversion from other Asian countries. Wei (2000) determines that corruption is problem for the development of FDI, because in the cause of corruption FDI will be decreases. The connection between the way of the host country trade balance and FDI inflow could be difficult. Among public factor that may be most important, we could use the literacy rate and degree of urbanization. Both contact the flow of FDI into the host country.

Shahzad and Zahid (2010) estimated that host nation is very important role in the production of any commodity on the long run period of time due to foreign direct investment.  Hussain and Kimuli (2012) determined that during which nature of bargaining power and  international trade  created by FDI in any economy during the particular period of time .certainly ,  sometime international business organization lean the transaction on the behalf of political risk position.  An international management helps firm, method a survey of foreign investor between July and October 2011. That shows the quarterly increasing the investment of emerging market.

Souimia and Adderrezzk (2013) estimated that in this study  we focus on GDP growth rate, import, export variable, the consumer price index and also include the macroeconomics variable. However FDI and growth of economics are very closely relationship special. If economic growth is dominant it means FDI of inflow is greater than FDI of outflow so economic growth is big role in any economy. It means endogenity problem is existence, in the developing nation the trend of FDI is less as compare to the advance countries. Foreign direct investment is a significant relationship with the factors of the resources in the developing countries.  This study is related to the developing economy it shows the FDI focus on the number of determining factor. In any economy foreign investor investment in the behalf of population size and environmental structure.