![]() ![]() Therefore, policymakers should focus on institutional quality along with globalization and financial development for higher inflows of FDI in emerging countries. Practical Implications: Institutional quality increases the FDI inflows. Finally, institutional quality strongly causes FDI inflows provided paired with either globalisation or financial development. However, the short-run unidirectional causality from institutional quality to FDI inflows is not found for all the countries. Other economic factors such as globalization and financial development show long-run and strong causality with FDI inflows. Findings: The study finds the existence of a long-run relationship between institutional quality and FDI inflows. Finally, for the robustness of results, we use the Pedroni co-integration technique. Then, we apply the panel Granger causality test to check the direction of causality. ![]() Next, it uses panel ARDL-PMG tests to check the existence of long-relationship among variables. It uses cross dependency (CD) and cross-sectional augments IPS tests to check cross-sectional dependency and heterogeneity across the group countries. Design/Methodology/Approach: The study uses Im-Pesaran-Shin (IPS) panel unit root test to check stationarity property. Other economic factors such as globalisation, financial development, and GDP are also considered. Purpose: The study examines the impact of institutional quality on Foreign Direct Investment (FDI) inflows for emerging economies from South Asiain the period 2002-2016. ![]()
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