The Determinants of Foreign Direct Investment Inflow in Afghanistan


Volume/Issue : Volume 6 - 2021, Issue 6 - June

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This research conducted for the purpose to explain the association between foreign direct investment and its determinants in Afghanistan. In addition, 21- years data of Afghanistan economic condition was used for this research study and the data period was 2000 to 2020. In addition, linear regression and correlation matrix is used for the statistical analysis in this research and the variables GDP, Inflation, exchange rate, trade openness and terrorism were included in the study as independent variables. Moreover, the foreign direct investment was dependent variable in this model and as results, the variables GDP and trade openness explored strong and positive association with foreign direct investment inflows of Afghanistan. However, the exchange rate and terrorism explored moderate association with foreign direct investment while inflation has weak association with foreign direct investment. And the research study further contributes that the variables GDP, inflation, exchange rate and terrorism were significant to foreign direct investment inflow in Afghanistan while the variable trade openness were insignificant to foreign direct investment inflow in Afghanistan. If we study the previous studies on foreign direct investment with it’s determinates in Afghanistan. Hence most of the studies gave the same association with it’s determinates as explained FDI mentioned above with some specific variables. The determinants of foreign direct investment inflow in Afghanistan is a versatile topic which can be discuss further more with different variable and different time period which can give a clear and understandable result to the researchers.

Keywords : FDI, GDP, Trade Openness, Inflation, Interst Rate, Terrorism


Paper Submission Last Date
31 - December - 2023

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