Impact of Foreign Direct Investment (FDI) on Stock Market Development in Pakistan

Abstract

This paper is an evaluation of the way Foreign Direct Investment (FDI) has contributed to the improvement of the inventory marketplace in Pakistan. The observe explores the consequences of inflows of FDI available in the marketplace capitalization, inventory turnover, and the liquidity in preferred the usage of secondary facts of the length 2000-2022 the use of the Pakistan Stock Exchange (PSX) and the State Bank of Pakistan (SBP). Through empirical take a look at, it's been proved that FDI performs an crucial position withinside the improvement of the inventory marketplace with the aid of using elevating the performance of the inventory marketplace, boosting traders self assurance and elevating liquidity. The effects additionally imply that macroeconomic stability, first-rate of law and monetary infrastructure are a number of the fundamental mediating variables in FDI-inventory marketplace relationship. This paper highlights the importance of drawing in sustainable FDI flows for you to decorate the boom of the capital markets in Pakistan and recommends coverage moves to accumulate investment-conducive environments.