Growth Drivers of Greenfield Investment in Pakistan: Time Period of 2002-2017

Abstract

Purpose:

Greenfield investment as a broad category of FDI ,refers to “When a parent country direct invest in a business or production in the foreign country by employing its new plants and all operational amenities.FDI is highly exaggerated by country’s investment climate and bendable economic policies.So,This study involves the relationship between Green Field Investment and its growth drivers.

Research methodology:

The complete study model consists on influence of GDP, Market Capitalization, Human Capital, Trade Openness Corporate Tax and Net Foreign Assets on Green Field Investment. The period is chosen for study is 2002 to 2017 and quantitative data is used for authenticity.EVIEWS as a statistical software is used for data analysis by setting specific criteria for rejection and acceptance of hypothesis.

Findings:

On the basis of results of statistics tools, it is indicated that corporate tax rate and Human Capital having as much impact on green field investment but remaining variables are inconsequential growth drivers of green field investment in Pakistan.

Implications:

Government of Pakistan should make easy entrance for the foreign investors to increase investment in Pakistan. Investment in fixed assets by state will provide collateral to investors. So, investment in fixed capital should be focused.

Keywords: Market Capitalization, Human Capital, Net Foreign Assets, Green Field Investment