Governance Infrastructure and Foreign Direct Investments: Evidence from South Asian Countries
FDI inflows to South Asian region is relatively low. Poor governance infrastructure in the region might have
caused this, because governance infrastructure plays a significant role in attracting FDIs. Therefore, this study investigates
the effect of regions governance factors in attracting FDIs during 2005 to 2013. A dynamic panel model is developed
considering the persistence behavior of FDI inflows. System-GMM estimator is used as the estimation technique. Findings
of the study indicate that the region’s governance factors do not discourage instead they significantly stimulate FDI inflows.
Keywords: FDI inflows, Governance Infrastructure, South Asia.