تلخیص
Purpose: The objective is to investigate the impact of exchange rate on FDI inflows in Pakistan, which is a developing economy. Along-with exchange rate, the cardinal variable, external debts and market size variables also have been used for the purpose of this study. Methodology: To deal with integration of variables at different order, i.e. one or zero, bounds testing approach to cointegration and for short and long-run effects estimation, auto-regressive distributed lag (ARDL) model have been used. Findings: Exchange rate is found positive highly significant with FDI inflows in short and long-run. Decrease in the value of exchange rate of recipient country results in the reduction of FDI inflows. Market size depicts positive impact in short and long-run for FDI inflows. External debts, surprisingly, show positive relationship in long-run and negative in short-run, where these positive and negative impacts are further investigated in the study. Originality: Since the Pakistan is experiencing very low growth of FDI inflows when compared to the region, it becomes directly policy relevance to identify the underlying factors responsible for this decline.