Investment significance in any country cannot be ignored for its direct and
indirect influences on the growth rate of the economy. Foreign capital inflows
are one of the major determinants of domestic private investment. Hence, this study analyzes the
effect of two kinds of foreign capital inflows, i.e. inward foreign direct investment and inward
foreign remittances on domestic investment covering a sample of five South Asian economies
from 1976 to 2017. The findings of the study reveal that both types of capital inflows raise the
domestic investment and the role of remaining variables on investment is also positive and
significant. The study recommended that steps should be undertaken to increase these foreign
capital inflows to raise the domestic investment in these countries.
1-Mansoor Mushtaq Lecturer,Department FAST School of Management,FAST School of Management, National University of Computer & Emerging Sciences, Islamabad, Pakistan2-Sania Shaheen PhD Scholar, International Institute of Islamic Economics (IIIE),International Islamic University, IIUI, Islamabad, Pakistan.3-Irfan Hussain Khan PhD Scholar,Economics Department,Government College University Faisalabad, Punjab, Pakistan.
Capital Inflows, Domestic Investment, Foreign Direct Investment