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ACKNOWLEDGEMENTS

I like to express my special thanks and prayers to my supervisor, Mr. Muhammad Zubair Mumtaz. This dissertation would not have been complete without his expert recommendations and unflagging patience. I would like to express lot of prayers and special word of thanks to my all University fellows, University management, University faculty, classmates, and my family who indefatigably listened to my ideas and assisted me in every moment when it was needed.

DEDICATION
This thesis is dedicated to my mother who has supported me all the way since the beginning of my life and in my educational career.

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ABSTRACT
The purpose of this research study is to examine the factors that contribute positive impact on Foreign Direct Investment (FDI), the performance of FDI, determinative effects on FDI, constraints that reduces the FDI, and how can be again enhance the FDI in Telecom Sector of Pakistan. In this research study FDI in telecom sector of Pakistan taken as dependent variable and Market size, Competition, Literacy Rate, Foreign Trade, and Per Capita Income are taken as Independent Variable. In this study secondary data is used. For the aim of investigation time series data has been selected (2001Q1-2011Q4) on quarterly basis. To check and analyze the dependent and independent variables relationship and changing trend between dependent and independent variables, the Regression Analysis is applied, and also other statistical tool like Augmented Dickey Fuller (ADF) Test is used in this research study. This study shows that all independent variables have real strong affect and are acting crucial role in an enhancing the FDI in telecom sector of Pakistan. In order to attract Foreign Direct Investment (FDI) in Telecom Sector of Pakistan, Government of Pakistan should provide a conducive environment for foreign investors so as they improve the economic and security conditions of the country, restructure the political environment, control the terrorism, tax benefits, allow more 3G Licenses etc. to make this sector more competitive and attractive.

Key Words: FDI, Telecom Sector, Pakistan Market Size, Competition, Literacy Rate, Foreign Trade, Per Capita Income

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TABLE OF CONTENTS
LIST OF FIGURES .................................................................................................................................................................. I LIST OF TABLES .................................................................................................................................................................. II CHAPTER I: INTRODUCTION .......................................................................................................................... 1

Background ......................................................................................................................................................................... 1 Rational Of Study ............................................................................................................................................................... 2 Problem Statement ............................................................................................................................................................. 3 Objectives of Study ............................................................................................................................................................. 3 Research Questions ............................................................................................................................................................ 3 Hypothesis ............................................................................................................................................................................ 3 CHAPTER II: CHAPTER III: LITERATURE REVIEW .............................................................................................................. 5 THEORETICAL FRAMEWORK ............................................................................................ 27

Dependent Variable.......................................................................................................................................................... 27 Independent Variables ..................................................................................................................................................... 28 CHAPTER IV: TELECOM SECTOR OF PAKISTAN ..................................................................................... 29

Mobilink ............................................................................................................................................................................. 31 Ufone ................................................................................................................................................................................... 31 Zong .................................................................................................................................................................................... 32 Telenor................................................................................................................................................................................ 32 Warid .................................................................................................................................................................................. 32 Teledenity ........................................................................................................................................................................... 33 Telecom Contribution to Exchequer ............................................................................................................................. 34 Taxes ................................................................................................................................................................................... 35 Telecom Revenues ............................................................................................................................................................ 36 Telecom Investment ......................................................................................................................................................... 37 Telecom Imports ............................................................................................................................................................... 39 CHAPTER V: METHODOLOGY ....................................................................................................................... 41

Specification of Variables ................................................................................................................................................ 42 Dependent Variable..................................................................................................................................................... 42 Explanatory Variables ................................................................................................................................................ 43 CHAPTER VI: CHAPTER VII: CHAPTER VIII: RESULTS AND DISCUSSION .................................................................................................. 45 CONCLUSION............................................................................................................................. 48 RECOMMENDATIONS ......................................................................................................... 49

REFERENCES....................................................................................................................................................................... 51 APPENDICES ........................................................................................................................................................................ 56

LIST OF FIGURES
Figure 1: Theoretical Framework .............................................................................................................. 27 Figure 2: Teledensity ................................................................................................................................... 34 Figure 3: Telecom Contribution to Exchequer ......................................................................................... 35 Figure 4: GST/FED Collected .................................................................................................................... 36 Figure 5: Telecom Revenues ....................................................................................................................... 37 Figure 6: Foreign Direct Investment ......................................................................................................... 39 Figure 7: Telecom Imports ......................................................................................................................... 40

LIST OF TABLES
Table 1: Annual Cellular Subscribers ....................................................................................................... 30 Table 2: Telecom Investment ..................................................................................................................... 38 Table 3: Foreign Direct Investment in Telecom Sector............................................................................ 43 Table 4: Independent Variables Data ........................................................................................................ 44 Table 5: Descriptive Statistics (2001-2011) ............................................................................................... 45 Table 6: Correlation between LFDI TEL and Other Variables .............................................................. 45 Table 7: Result of ADF Test ....................................................................................................................... 46 Table 8: Regression Results (2001-2011) ................................................................................................... 46

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

CHAPTER I:
Background

INTRODUCTION

Foreign Direct Investment (FDI) plays very crucial role in global business activities. It can help an enterprise with new and alternative marketing channels, relatively low price production facilities, cheap labor, approached unique technology, competitive environment, unique products and different investment opportunities. FDI means when one company from any country making its physical investment into any other country for getting different benefits like high profit, low production cost, cheap labor and new technology advantage. It provides investment benefits to both home country and host country by the passage of time. It enhances the growth, skills, jobs and development of the host countries. It is collection of assets, new technology, expert management, and easy access to market. It provides a major source of assets which brings an up-to-date technology for different market users. Government of Pakistan has opened foreign investment in telecom sector, because it a very strong sector among other sectors in terms of economic growth and development of the country. If we review past few years of Pakistan Telecom Sector performance and economic growth and development of Pakistan, the FDI shows positive and significant impact on telecom sector of Pakistan, but gradually FDI reduces due to some factors like Political instability, Terrorist Attacks, Less Secure Environment, Inflation, Weak Leadership, Low Literacy Level and Fluctuation in Economic Growth. There are lots of studies exercised on FDI in telecom sector of Pakistan. Some developing countries think that FDI is good for economic growth of the country, but on the other side some countries are opposite that they think FDI is bad for development of a country. But mostly countries believe and agree that without FDI there is no economic growth and development of the country. Awan, Khan, and Zaman (2011) explains in his research paper that the major economic determinants of FDI inflows in commodity producing sector of Pakistan, and the result disclosed that Gross Domestic Product (GDP), Real Growth Rate of GDP in Commodity Producing Sector (CPS), Gross Fixed Capital Formation (GFCF), Foreign Exchange Reserves (FOREX), Degree of Trade

Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

Openness (RTO) and Per Capita Income (PC) are the key determinants of FDI inflows in commodity producing sector of Pakistan, also inquire into that all these variables are found statistically substantial with positive signs. Hashim et al. (2011) narrates the positive and substantial affect of competition on telecom sector performance, this study also shows that competition is requiring attention for the complete development of telecom sector. Tabassum, Nazeer and Siddiqui (2012) explains that for long run policies the inflow of FDI has largely been directed toward import substitution production for the domestic market on the other side little has gone dynamics as analyzed industries by using Co-integration Analysis, and for short term policies dynamics as analyzed by the Error Correlation Mechanism (ECM) showed that the short term disagreement were significant enough to not converge toward equilibrium. Rehman, Jaffri and Ahmed (2010) gives an idea that massive foreign direct investment inflows and workers payment of money sent to a person in another place or remittances have important appreciated equilibrium real exchange rate of Pakistan. Sirari and Bohra (2011) examine the importance of the FDI inflows in Indian service sector and relating the growth of service sector foreign direct investment in generation of employment like skilled and unskilled workers of the country. Hashim, Munir and Khan (2007) narrate the foreign direct investment in telecom sector of Pakistan by using empirical analysis. This study shows that foreign direct investment as dependent variables and market size, competition, literacy rate, foreign trade and per capita income as independent variables having a positive and significant impact on foreign direct investment in telecom sector of Pakistan.

Rational Of Study
Foreign Direct Investment have a huge scope of foreign investment opportunity in telecom sector of Pakistan and is growing gradually due to its potential market, but if we look back and compare the current situation of FDI in telecom sector, the situation is opposite from last 5 years progress. This study analyze and give some valuable solutions by considering the present and past situation and changing trend of foreign direct investment in telecom sector of Pakistan. This study will be beneficiary for academics like teachers, students and person related with education field. Practitioner experts will take benefit from this research study. With the help of this study foreign investor can take

Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

an overview on FDI in telecom sector of Pakistan. This study will also motivate to foreign investor to invest in telecom sector of Pakistan and that will be good sign for Pakistans economic growth and development.

Problem Statement
This whole research study examine the factors that give positive impact on Foreign Direct Investment (FDI), the FDI performance, its determinative effects, its constraints that are reduces the FDI, and enhancement of FDI in Telecom Sector.

Objectives of Study
To identify the factors and performance that give positive impact on FDI in Telecom Sector of Pakistan. To identify the determinative effects on FDI in Telecom Sector of Pakistan To identify the constraints that are reduces the FDI in Telecom Sector of Pakistan. To suggest some ways that can help to enhance the FDI in Telecom Sector of Pakistan.

Research Questions
Q#1: What are the factors and performance indicators that give positive impact on FDI in Telecom Sector of Pakistan? Q#2: What are the main determinative consequences on FDI in Telecom Sector of Pakistan? Q#3: How can be the major constraints cut down the FDI in Telecom Sector of Pakistan? Q#4: What factors contribute to enhance FDI in Telecom Sector of Pakistan?

Hypothesis
a. Alternative Hypothesis All the variables show the positive relationship with FDI in telecom sector of Pakistan b. Null Hypothesis All the variables dont show the positive relationship with FDI in telecom sector of Pakistan

Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

In this research study FDI in telecom sector of Pakistan taken as dependent variable and Market size, Competition, Literacy Rate, Foreign Trade, and Per Capita Income are taken as Independent Variable. In this study Secondary data is used. For the aim of investigation time series data has been selected (2001Q-2011Q4) on quarterly basis. To check and analyze the dependent and independent variables relationship and changing trend between dependent and independent variables, the Regression Analysis is applied, and also other statistical tool like Augmented Dickey Fuller (ADF) Test is used in this research study.

The second chapter of this research is the literature review of different twenty nine research articles related with my research topic. The third chapter of this research is telecom sector of Pakistan. The fourth chapter of this research is methodology. The fifth chapter of this research is results and discussion. The sixth chapter of this research is conclusion and the final chapter of this research is recommendations. So, the main focus of this research is the impact on the performance of Foreign Direct Investment in Telecom Sector of Pakistan.

Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

CHAPTER II:

LITERATURE REVIEW

FDI is very important for any countrys growth and development. There are so many studies have been carried on by different researchers to point out the significance of FDI. Hence, the literature reviews of few important research articles are explained as following. Khan & Khan (2011) point out this research by using the framework of Granger causality and panel co integration, and the time period ranges from 1981-2008, and this research paper is conducted in Pakistan. The result showed that it support with proof of panel co-integration among FDI and its output. It showed that FDI gave a positive effect on its output in the long term. It also showed that causality running from GDP to FDI in the long term. On the other hand it showed that two-way causality among GDP and FDI is recognizing in short term period. It showed that growth due to FDI is varying from sector to sector. The most important result is taken from this research is that the in different primary, manufacturing and services sectors with the help of FDI. According to my thought that it is overall good article in highlighting the importance of FDI, but if the write focused on some aspects of FDI with deep description that will be more benefited for every readers.

Awan, Khan and Zaman (2011) narrate this study on the major economic determinants of inflows of Foreign Direct Investment, especially in commodity producing sector of Pakistan. The approached is used for this research is time series data in quarterly, and the time period ranges from 1996Q1-2008Q4. In this research there are two methods uses namely Co-Integration and Error Correction Model (ECM). The result through these models showed that Gross Domestic Product, Commodity Producing Sector, Gross Fixed Capital Formation, Foreign Exchange Reserves, Degree of Trade Openness, and Per Capita Income are main determinants of Foreign Direct Investment, especially in commodity producing sector of Pakistan. This study is also revealed that all these variables has important role and showed positivity on Inflow of Foreign Direct Investment and commodity producing sector of Pakistan. According to my understanding that writer well managed all the aspects related with inflows of FDI, but if he explained other factors like enhancement of service sector that will be more attractive.

Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

Hashim et al. (2011) explains the main impact of competition on the telecom sector of Pakistan. The data for this research is used quarterly, time period ranges from 1999Q1 to 2006Q4. In this study performance of telecommunication sector taken as a dependent variable, and the competition is taken as an independent variable. In this research the method is used multiple regression models in log linear form. This study showed that positive and important impact of competition on telecom sector of Pakistan. It also showed that due to competition the telecom sector is able to increase the access of different telecommunication services in different widespread areas of Pakistan. According to my perception that the writer describes well about the impact of competition on FDI with quarterly based data, but if he relates other variables with competition that will be more attractive for every readers in long run as well as in short run.

Hashim and Zaman (2010) suggest a study on the effect of telecom sectors investment and how to increase the trade. The approached is used for this research is time series data, and time period ranges from 1950-1951 to 2006-2007. In this study foreign trade and domestic trade were taken as a dependent variables and telecommunication sector investment was taken as independent variable. The methods used for this study is regressions models in log linear form. This study showed that the positive and important impact of telecommunication sector investment on foreign and domestic trade. This study also reveals that due to increase in telecom services and facilities the trading activities also increase. According to my observation that writer have a good focus on overall study in terms of to identify the effect of telecom sector investment and how to increase the trade, but if the writer some relate the whole study with some more independent variables then it will give more clear idea about the effect.

Tabassum, Nazeer and Siddiqui (2012) point out that Foreign Direct Investment can increase the imports of host country, the reason behind Multi-National Corporation (MNCs) having a high trend to bought commodities from a foreign country intermediate

Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

inputs, capital goods and other services that are not available in the host countries. This study also showed that it also affect the export side of the countries. The main focus of this study is to find the relationship between FDI and Imports demand, also FDI and Export supply of Pakistan, time ranges from 1973 to 2009. The analysis of this research is to focus on the long run equilibrium and the relationship between FDI and export supply, and also FDI and import demand of Pakistan. The techniques are used for this research is econometric techniques in terms of Co-integration Analysis and Error mechanism. The results revealed that import demand is stable long run with the real import, on the other hand FDI in the long run showed a positive relation with real exports, but the coefficient is opposite for both conditions. It showed that the inflow is having a large portion towards import industries and if we look on other side the inflow is having a less portion towards export industries. It showed that all long run policies are good for implementation. It describes that for short term the Error Correction Mechanism (ECM) showed the differences that are not suitable toward equilibrium and for to readjust in both models it take large time that is time consuming process. It also revealed that single side causality was found between FDI and real imports which is proved by theoretical and also by empirical evidence, but there is no causality detected between Foreign Direct Investment and real export. According to my understanding the whole research give a very broad idea about the FDI that can increase import due to the MNCs massive scale buying and selling activities, but if writer put some evidence with practical examples then it will be clearer for readers.

Alam and Zubayer (2010) come up with empirical research that investigates the partner countries bears less cost if they make regional integration arrangements. This study showed that reduce in cost increase the trade and also increase the pattern of FDI. As mentioned the this research that South Asian Association for Regional Cooperation (SAARC) come into existence on 8th December 1985 with the combination of seven countries namely Sri Lanka, Pakistan, Nepal, Maldives, India, Bhutan, and Bangladesh. This study expressed that there is very low level of intra regional trade between the countries in the period of 25 years, in percentage it is less than 5%. This research study

Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

indicate that intra regional flow is less than important sources that goes out from the country in terms of FDI. This study presented that there is a lot of differences between the member countries, but each countries have a scope and potential to increase the intra regional inflow in terms of FDI. In this study there are number of research papers delivered by focusing on the regional trade and integration, and give a vision of future research on FDIs Inflow and economic integration between the countries. According to my observation this research papers is very useful and very important for all seven countries of SAARC, but if writer add some practical models that will be more accurate and attractive for other researchers.

Malik, Basit and Qazi (2011) explain that all unions want to encourage their members choices. In this study write says that the main object of any union is to care of individuals, organization and the government, because to enhance the economic growth and social attitude of their man components. This study shows that unions can play a very important role in different issues like unemployment, job security, wages problem, health issue, tariffs issues, technology problems, and social safety. This study describes that unions are beneficial for individual member of organization as well as for state rules and regulation to labor issues and improvement in the requirements of companys employees. This study also describe that unions always think about on the benefits of their employees and enhance the confidence of workers that you are very important for us. This study is conducted in Pakistan, and the writers firstly focus history and development of unions in Pakistan. In addition, the writers focus on pros and cons of unions, then what is the current situation in private and public companies, and then what are the challenges that are companies facing. The second focus of this study that what is a major role of unions in Pakistan like Pakistan Telecommunication Corporation Limited (PTCL) in most organization is working very well. This study further describe that unions are losing their strength by the passage of time, as we can see globally and we can take an example in Pakistan is PTCL. This study indicates that before privatization of PTCL since 2006, it works very well, but the situation is opposite now, because people those working in PTCL loosing hopes and confidence; they know nothing can be left for their future. This

Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

study gives a solution that unions must review polices and come up with hard effort to retake a place, and also unions mostly focus on future social vision for workers. According to my understanding the overall study is covering mostly aspects of unions, but if the writer gives some solutions regarding how unions can reappears for social work and betterment of employment in current situation, that will be very attractive and reasonable results for different unions.

Ch et al. (2012) explains that globalization has a very significant impact on Pakistans economy. In this study the writers shows that all the growth sectors has been affect by Globalization in different ways like directly or indirectly. The center point of this study is to analyze the Telecommunication Sector in terms of Pakistans Economy. Furthermore, writer give evidence that how Globalization effects on telecom sector of Pakistan. In this study the methods are used like past data with the help of statistical tools to find the Globalization and its impact on telecom sector of Pakistan. This study also gives an idea that with the help of Globalization how increase the performance of Pakistan telecom sector. According to my perception the writer put very hard effort to analyze the Globalization and its impact on telecom sector of Pakistan, and shows very positive ideas about the topic, but if writer used some independent and dependent variables, then this whole study will be more attractive.

Khan and Khattak (2009) come up with to investigate the different economic factors and their effect on Foreign Direct Investment (FDI) in Pakistans economy. The method used in this study is econometric analysis, the data is used for this research is secondary data, and time ranges from 1971-2005. In this study writers used different models to analyze and for empirical estimation like Log Linear Regression Model and Least Square. In this study writers also used Augmented Dickey Fuller Test and Error Correction Model for the analysis of time series data. The findings of this study is different economic factors have a significant effect on FDI, the economic factors used in this study are market size comparing with GDP, Openness of Trade, Investment in Domestic sectors, and Return on Investment (ROI). This study also give some important

Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

solution to enhance the FDI in Pakistans economy, like firstly this study propose that least square estimation must be used, the second thing that highlighted in this study is that government should make a equal and provide secure economic environment to every firm, then provide good and reputed infrastructure, then enhance the confidence of domestic investment, then debt burden should be minimized, the provide a financial benefits to the investor, and there should be proper and lawful government policies. According to my perception article is well written by writers, very informative and very informative for readers, but if writer put few more economic factors like competition and literacy rate, then this article is more attractive for researchers.

Rehman, Jaffri and Ahmed (2010) examine the inflows of FDI on Equilibrium Real Exchange Rate of Pakistan. In this study the time period ranges from 1993 M7 to 2009 M3. In this study writer used Behavioral Equilibrium Real Exchange Rate (BEER) technique, and the writer also link BEER technique with econometric technique as cointegration, because he want to make a behavioral link between macroeconomic key factors and real exchange rate. In this study writers found that there is huge relationship between foreign direct investment inflow and a payment of money sent to a person in another other country comparing with equilibrium real exchange of Pakistan. In this study the main focus of writer is to find out that the effects of equilibrium real exchange rate of Pakistan on foreign direct investment and workers salary in terms of remittances. According to my understanding that overall this study is very informative, useful and unique topic for every researchers, but if writer put some dependent and independent variables and then he find the relationships and their effects with each other, then this study can b more attractive for every readers.

Preetha (2011) narrates that Foreign Direct Investment is very essential for every countrys growth and development. In this study the writer shows that countries where FDI is insufficient consider as poor countries. This study describes that if FDI increases in terms of direct currency loan and technology that can help to enhance the poor country growth and economic development. In this study there are numbers of evidence to prove

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

that FDI can play a very vital role in the economic development of the country. This study conducted in India. The writer shows that with the help of FDI in telecom sector of India that creates a growth and development path for the country progress. The main focus of this study is to identify the current situation of foreign direct investment in the Indian telecom sector, and the second part that is focused by writer is to identify the main problems confronting foreign companies that why they are not investing in Indian telecom sector. In this study shows that approximately above 45% increase in growth of telecom sector of India in recent years. This study shows that how possible speedy growth in telecom sector in India, the answer is firstly proactive and positive decision of government of India, and second is the participation of both private and public sector of Indian government. This study close with short and small econometric test with the help of economic factors that influencing the FDI, then this study explain that how FDI put in by Go-Green, and then elaborate the most powerful sectors of Indian economy like Information Technology (IT) and telecom sector. According to my understanding overall this articles is very useful in terms of importance of FDI, but if writer use some models like linear equation model in this research then it can be more attractive for different researcher.

Faridi, Malik and Bashir (2011) suggest that the transportation and telecommunication can play a very significant role in economic growth of Pakistan. In this study writer focus on basic two sectors namely transportation and telecommunication sector. This study describes that these two sectors are very important sectors for any countrys economic growth. It can help by increasing economies of scale by using production procedures and by joining people. In this study Solow Growth Model is used for checking the relationship of transportation and communication on economic growth of Pakistan. In this study writers used time series data, and the time periods range from 1972 to 2010. Furthermore, writers also used Autoregressive model for checking and estimating the authentic results. In this study writers used two basic variables like Telecom and GDP, and Capital and GDP to check the causal association between them. In this study writers showed that economic development of Pakistan is largely depends

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

on Capital and Transportation. On the other hand writer shows that by deriving the communication in terms of telephone line inadequacy economic development of the country. In this study that writers give some basic suggestion like Government should launch some training programs that will help to enhance the technical skills with some basic education. According to my perception overall this study is very informative and very useful for every researcher, but if writer put some econometric models for this study to prove relationship between transportation and telecommunication impact on economic growth of Pakistan, then this study will be more attractive for different researchers.

Sirari and Bohra (2011) point out the performance of Foreign Direct Investment (FDI) in service sector of India. In this study the writers describe that FDI is a major source and tool that help to enhance, growth and development of employment, capital and productivity. This study also work out that FDI can play a very important role to boost up the technology, improvement of skills, and increase in the managerial capacity of the country. This study shows result that FDI inflows from 1991 in service sector of Indian economy give very important trend in the development of economic growth of the country. This study also revealed that with the help of FDI in service sector the employment in terms of skilled employ and unskilled employ also increase. According to my thought that overall this study is well managed by writer, but if writer used some statistical tools with the help of some models then this study can be more attractive for very researcher.

Kransdorff (2010) suggest that how tax incentives and foreign direct investment play role in South Africa. In this study writer says that there is a lot of inequality between rich and poor people of South Africa, this difference leads South Africa on top rank between other countries of the world. This study shows that to handle this huge difference between rich and poor people that is hurdling in the progress of the country, then the government took macroeconomic policy namely Growth Employment and Redistribution (GEAR) strategy that is exist in locally and globally. The main object of this strategy is to raise the welfare of all the people who living in South Africa, then

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

increase the economic growth of the country, and then create pool of opportunity that leads to economic growth of South Africa. In this study writer shows that the growth rate of 6% coupled that is estimated by GEAR and this study also indicate that with the help of GEAR 400,000 annual job creations is possible, that is required for South Africa. But this study also indicates that it is very difficult to say that all the required goals of the South Africa are achieved. In this study writer describe the importance of Foreign Direct Investment (FDI), and also writer indicate that FDI is a key element and can play a very important role in economic growth of any country. This study describes that if domestic savings rate is less, then FDI can play a main role as a fund provider for a country. In this study writers shows that South Africa is not able to attract the large amount of foreign direct investment in the country. This study also shows that current situation of South Africa is better from last few years, because foreign investor are investing a lot of money in South Africa due to liberalization. In this study writer used some econometric techniques to justify that taxation can also play important role and impact on any country in terms of FDI inflows increase or decrease, it means if taxation is low, then FDI increases, and if taxation is high in any country then FDI is low. The main focus of this study is to find out that in South Africas tax is the main factor that causes the hurdle to attract the foreign direct investment in country. According to my perception this how whole research article is very practical and essential for any countrys economist, because this gives an idea that how any country can attract the foreign direct investment, but if writer give some proof with the help of some model and by using dependent and independent variable, then this study can be more attractive for any researcher.

Hashmi (2012) narrates the main factors in participation of Foreign Direct Investment (FDI) of United States large corporations in different countries. In this study the writers shows that what are the main factors that help to succeed United States corporations in international businesses. In this study writer shows that firstly all successful economic growth is due to the foreign direct investment. Secondly the writers shows that rise in social activities help the citizens of world feel very satisfied with the help of large U.S Corporation involvement in international environment. In this study the

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

writer used data that is collected from different and specific United States Corporation. This study shows that there are the three important factors that help to large United States Corporation in international operations like low production and operation cost, Geographical differences and prominent market size. According to my perception that writer took a very broad topic for this research, and he wrote this study in very comprehensive style, but if he used some statistical tools and some models that are related this study that can be more attractive regarding this research for every information seeker or researcher.

Azam (2010) elaborate this research on different economic causal factors of Foreign Direct Investment (FDI) in different republic namely Turkmenistan, Kyrgyz and Armenia by using theory and different evidence. The main focus of this study is to check the various economic causal factors on Foreign Direct Investment (FDI). In this study three specific countries selected from Central Asia like Turkmenistan, Kyrgyz Republic and Armenia. In this study secondary data is used, and the time period ranges from 1991 to 2009. In this study secondary data is taken from World Development Indicator on different issues for testing the whole research. In this study two methods are applied namely Simple Economic Model in log form and the Least Squares technique. This study shows that there is a positive relationship between Market Size and FDI, and Official development assistance and FDI, but there is negative relationship between inflation and FDI. In this study when different techniques are apply on Armenia the result shows that there is less impact of Official Development Assistance on Foreign Direct Investment. In this study when different techniques are apply on Kyrgyz Republic also give same result as Armenia like there is less impact of Inflation on foreign direct investment with anticipated negative sign. In this study writer give some beneficial recommendation like he says that there is need to enhance the Market Size and Official Development Assistance, and there is need of handled inflation if countries want to progress and excel the level of foreign direct investment for economic development of country. According to my understanding about this research study that writer put had effort to prove his idea very well, but if writer used some more statistical tools with the help of dependent and

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

independent variables for this study then this study will be more attractive for different researchers.

Akhtar (2009) explains the affect of Macroeconomic Determinants on Telecommunication Sector and its operation in Pakistan. This study also shows the different Policy Issues in Telecommunication Sector and its performance in Pakistan. In this study writer used time series data. In this study writer used some policy and macroeconomic variables to measure the performance of telecommunication sector of Pakistan. This study shows that receptivity of foreign companies in telecom sector and by using the current population contributed to enhance the output level of cellular and fixed networks of the country. This study shows that there is a mixed relationship between Real Per Capita GDP and a Separate Regulator of the country. This study also reveals that with the increase in the progress of cellular networks gives benefits by increasing the growing ratio of fixed line networks. In this study writer give some useful suggestions that to all foreign companies to invest in telecom sector of Pakistan, there is need of maintained long term relationship and some amendment in Government Policies. In this study writer also suggest that when foreign companies invest in telecom sector of Pakistan then country can take benefit by using new technology and this technology leads to the development of countrys economic and financial growth. According to my understanding about this study whole article is well written, and writer link all the aspects of this study very well, but if writer use some more econometric techniques by using statistical tools, then this study will be more valuable for different researchers.

Shahid, Lian and Liu (2007) explain the contest and relaxation terms and conditions for telecom sector in China and Pakistan two friendly countries. In this study writer shows that there is a direct relationship between telecommunication sector and economic growth of the country, because when there is increase in development of telecommunication then economic growth of the country also increases. In this study writer shows that there are number of developed countries that openness investment opportunity in telecom sector between 1980s and 1990s, and also some developing

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

countries are still trying to increase the foreign investment in telecom sector of the country. In this study writers shows that every country is achieving the foreign direct investment opportunity by different approaches, because every country has its own social living style and different economic conditions of the country. In this study writer shows that different countries can learn to each other experiences in terms of each other policies, competition advantages, worldwide service, consumer concern protections, and enhancement of boosted services. In this study writer compares the policies of China and Pakistan for checking the development of telecom sector, and give some recommendation to that upcoming mergers in the world with the help of taking and benefiting from experience of other developed nations. In this study the main focus of the writer is liberalized policies and competition advantages. In this study writer compare the China and Pakistan policies, then writer analyze that Pakistan is very proactive to liberalize the competitive market as compare to China is step by step liberalizing and regulating the competitive market and China is using assured approach. In this study writers also tell that Pakistan is helping new foreign firms by liberalization of regulation and policies of the countries, because this leads to enhancement of private sector investment. This study shows that on the other side China is using opposite strategy to Pakistan, China want to promote Government based companies that are operating within the country, so China is not liberalizing its regulation and policies to allow foreign firms enter in telecom sector of China, because China knows that foreign firms are good and they have a ability to operate in host countrys telecom sector and can generate high profit, so China wants to retain this profit for the betterment of the country. In this study writer also shows that China want to make a reasonable competition but on the other hand Pakistan believe on open competition approached. In this study shows that economic growth of Pakistan is boosted with the enhancement, open competition, liberalization and deregulation of foreign firms in telecom sector, this is also proved by the some good economist by using different telecom indicators. In this study writers give some useful recommendations to both countries that there is need of some more expertise and skillful labor force that will help to adopt new and innovative technology and both countries can take benefits from this valuable sector that is telecom sector. According to my understanding about this

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

study the writers put very hard effort to managed and organize this research by systematic way, but if writer put some dependent and independent variables and check the relationship with FDI by using some statistical tools, then this study can be more informative for different researchers.

Ansari and Ranga (2010) narrates that the progress of FDI in India, the current situation of FDI in India, current issues in economy of India, and some policies with recommendations for India. In this study the writer focus on importance of FDI to enhance the growth of the country. This study shows that foreign direct investment without debt financial instrument for every country, which leads to the economic growth of the country. In this study writer describes that it is a tool to gain technical skills with new technology knowledge, and it also help to generate the employment opportunities in the country. In this study writer also show some draw backs of foreign direct investment like it can harm the sovereignty of the host country, and it can also decrease the performance of domestic business of the host country. In this study, writer shows that by using of the natural resources of host country that leads to high profit by passage of time. This study also explains the different pros and cons of foreign direct investment. In this study writer also highlight the changing pattern of foreign direct investment gradually. This study analyze that there is a very immense competition on foreign direct investment between different developed countries. This study shows that India is also one of the countries that is attracting very huge amount in shape of foreign direct investment. In this study writer shows that India is very good in attracting the foreign direct investment in service sector, but very behind to attracting the foreign direct investment for manufacturing sector, because manufacturing sector is also one of the best economic growth sector. In this study writer shows that foreign direct investment can improve the situation of economic growth, but it is not necessary that it also handle and improve other issues like poverty obliteration, joblessness, and other economic problems. This study gives some useful recommendation like if India want to attain the 20-20 objective, then India must do massive investment in this field. In this study writer also suggest that government should focus on clarity and harmonious uniformity in regulation and policy

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

with broad in scope for long term economic growth strategy. According to my understanding about this research study that it is a good article with very useful information for information seekers, but if writer put some more econometric approaches with using statistical tools for testing the give information, then it will be more and authentic article for different researchers.

Gupta and Gupta (2011) come up with an estimation of FDI with particular indicators on India and Chinas Economy. In this study writer focus on the importance of FDI, and describes that with the help of FDI the economic situation of any country also boosted. In this study writer shows that with the help of FDI a lot of capital flow in the country and also innovative technology, job creation and enhancement in the economic growth of the country. In this study writer shows that there is vital role of China and India to increase the usage of foreign direct investment in the global economy. This study shows that India and China is in list of top 10 from overall world to promote the foreign direct investment. This study also shows that China and Indias economy is growing with very high pace as compare to other countries in the globe, and some economist predict that both country can be a super power in future. In this study writer used statistical tools like Correlation and T-test on both countries China and Indias Economies. In this study writer divide whole research paper into four sections namely first section consist of foreign direct investment policies on China and Indias economies, second section is also consist of foreign direct investment policies on India and Chinas economies, third section of this research is methodology of research and analysis of data, and the fourth section of this research consist of some useful suggestions and finding. According to my understanding about this whole research paper that it is well organized by writer, and some very useful information is available in this study for every information seeker, but if writer used some authentic model in this study that will be more attractive for different researchers.

Lamine and Yang (2010) narrates the significant effect of Foreign Direct Investment (FDI) on Economic Growth by using different evidence from Guinea

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

Republic in West Africa. In this study the writer focus on the important role of foreign direct investment on economic growth of Guinea Republic. In this model writer used the Granger Causality Technique to check the relationship between economic growth of the Guinea Republic and foreign direct investment. This study shows by the help of Granger Causality Test that GDP of the country can enhance the attractiveness of foreign direct investment, it means when gross domestic product increases in Guinea Republic then foreign direct investment increases and when gross domestic product decreases then foreign direct investment also decreases in Guinea Republic. In this study writer also explain that foreign direct investment can promoted by the help employment factor, so the Guinea Republic Government has play a very important role to attracting the foreign direct investment for other countries by the help of employment promotion factor. This study also shows that with the help of school enrollment GDP of the country can increases, and increase in GDP also increase the foreign direct investment from other country. In this study writer reveal a very important point that current situation of Guinea Republic is improving day by day, because of good government regulations and authentic policies, that leads to attractiveness of foreign investor and hold up of healthy investor for economic growth of the country. According to my understanding about this study, it is very informative and well written study, but if writer put some dependent and independent variables and then check the relationship between each other, then the results of this study will be more accurate and the study will be more attractive for different researchers.

Kumar and Dhingra (2011) state the affect of less restriction on FDI in Indias Economy. In this study writer describe that foreign direct investment is a unique way for every international economies, which helps to create a long term relationship between different countries of the world. This study shows that the foreign direct investment is took for economic growth of every country, it can be achieved through entrepreneurial Skills, Managerial Skills, and Technical Skills that are very essential for economic growth. In this study writer also shows that foreign direct investment is one of the very powerful and critical instrument for economic growth of every country. In this study

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

writer shows that every country wants to enhance the economic development by using foreign direct investment. This study shows that India like other developing countries want to enhance the economic growth of his country by taking the benefit from foreign direct investment. In this study writer shows that India is very keen to inflow of foreign direct investment from 1990s and 2000s with the help of giving foreign firms friendly environment, openness in trade, deregulation of trade, national ownership privatization, and enhance the territorial consolidation. In this study writer shows that in 1980s Indian Government liberalize a policies to increase the foreign direct investment, this FDI mostly inflows in new technology sector and second is in exports sectors by giving and creating a friendly environment. In this study writer also explain that during 1990s Indian Government take some proactive steps like accept benefits of host country, freedom from duty, and liberalizations regarding foreign ownership in the country, these strategy gives a lot of enhancement in foreign direct investment that leads to improvement in the economic growth of India. This study also shows that there is a best boost of foreign direct investment in Indias economic growth during 1980s and 1990s, so this is the best period for Indian economy in terms of economic growth of the country. In this study writer shows that after 1991 this trend of foreign direct investment has been changed as post liberalization period, during this period there is two best things has been increased, first thing is that foreign direct investment boosted with very high pace and the second thing is that very big change in different sector composing with foreign direct investment enormously. According to my perception about this study that it is written well with historical evidence provided by the writer, but if writer used some well known statistical tools in this study then this study will be more attractive in terms of information regarding the importance of foreign direct investment in economic growth of the any country for every researcher.

Moses (2011) narrates the FDI in term of Oil and Nonoil FDI, and how foreign direct investment help to boost the economic growth in Nigeria. In this study writer describe that foreign direct investment is a major and attractive instrument that play a very significant role with domestic economy of the different country, which leads to

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

economic growth and development of the country. This study indicates that economic growth with the help of foreign direct investment depends on the strength in the area of country and the usage of that area. This study explains that there is huge inflow trend of foreign direct investment in extractive industry, mostly during the current political system and compared to non-extractive sector not well in terms of foreign direct investment, and the question rise that how can increase the FDI in this sector and how can achieve more economic growth in Nigeria. The main focus of this study is to analyze the affect of Oil and Non-Oil FDI in the economic growth of Nigeria. In this study OLS technique is used, time period ranges from 1970 to 2008. In this study writer used empirical testing to identify the affect of extractive and some other sectors on the economic growth of Nigeria. In this study writer take Extractive FDI as OILFDI sector and on the other hand Non-Extractive FDI as NONOILFDI sector and check the effect of both on the economy of Nigeria. This study shows that the variables are used to check the probabilities and significant on Nigerian economy are t and the f statistic, and the result proved with the help of determination coefficient (R2) 78%. This study reveals that there is positive autocorrelation relationship between these variables. This study also reveals that in NONOILFDI sector having a more important and positive effect on Nigerian economy and in OILFDI sector has averaged impact on the Nigerian economy. This study also shows that FDI is higher in case of extractive sector and moderate positive effects on Nigerian economy. In this study writer put up some recommendations to Government and all Stakeholders that they need to enhance the foreign direct investment in Non-Oil Sectors, because it has more advantages in terms of high economic returns in the shape of different valuable factors like advantage of human capital, high employment opportunities and local capacities that will be more prevailed by exiles. In this study writer further stress on that Nigerian Government should toned up the local capacity policy in extractive sector to extension the benefits of that industry to Nigerian economic growth. According to my understanding about this study that it is very unique top to research, and it is good quality work from the writer side, but if writer come up with some more econometric and statistical tools by comparing and checking the relationship

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

of dependent and independent variables, then this study can be more accurate, authentic and informative for different researchers.

Goel and Shivani (2012) suggest that to check the development practice of FDI in Indian economy by analyzing region wise, sector wise and country wise. In this study writer describes that two important tools that play very important role in the development of the economic growth of the country, first tool is Globalization and the other tool is foreign direct investment. This study shows that globalization and foreign direct investment is can play a very vital role with the help of creating unique products, with essential skills, comfortable access to markets, and injection of innovative technology for the host country. In this study writer shows that all countries of the world are trying to promote the foreign investors with huge investment. This study shows that every foreign investor want to invest either in China or in India, because if we look the statistics of different countries in terms of foreign direct investment, India is on second number best place for foreign investors, and the first number is with China, mostly foreign investors want to invest in China before India, so with the help of foreign investors investment both China and Indian economy is on boost in economic growth of the country. In this study writer analyze the movements and growth practice of foreign direct investment by checking on different sectors of India, and the data is used in this study taken from different countries that investing in India during the time periods of 2000 to 2010. According to my perception about this study is very well written in terms of information, beneficial, and experienced based, but if writer put some econometric techniques with the help of statistical tools to test the available information, then this article will be more attractive for different researchers.

Rajalakshmi and Ramachandran (2011) explain that how FDI can affect on Indias Automobile Sector by using the passenger car segment. In this study writer shows that there is huge increase of FDI in Automobile Industry because India liberalize his economic investment policies as compare to other industries of the country. In this study there is 18% increase of FDI growth in automobile industry. This study shows that there

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

are so many advantages that are provided by automobile sector namely updated technology, cost effectiveness, and effective work force. Furthermore, in this study writer shows that with the combination of Automobile industry, Auto Ancillary Industry and R&D centers Indian economic growth increasing with very high pace. This study shows that automobile sector is number 3rd in manufacturing of three wheelers vehicle and it is number 2nd in manufacturing of two wheelers vehicle. In this study writer shows that there are number of developed countries investing namely United States of America, South Korea, Netherlands, Germany, United Kingdom, and Japan. In this study writer describe that Ministry of Commerce of India shows that there is only $18.35 billion received in foreign direct investment in very first eleven months during 2010-2011. This study also indicate that there is $63 billion came in eleven month of last financial year as compare to current previous year it is very high increase in FDI. This study shows that Automotive Sector is having a very bright future. In this study write explains that original automobile companies are changing with foreign multinational companies because of getting consumer satisfaction in long run. This study predicts that automotive sector will boost more in 2012. In this study writer narrates that there are some major foreign investors that playing a very vital role in the progress of Automobile Industry of India. This study also describes the passenger growth car segment; production enhancement; increases the sales and investment opportunities were discussed. In this study writer used the three statistical instruments to examining this study, namely ARIMA, Linear and Compound Model. In this study writer also further used time series investigation for predicting the future outcome. According to my understanding on this study, it is well written and well tested by different statistical model, but if writer use some dependent and independent variables, and then to check their relationship with FDI in different sector, then this study will be more attractive for different researchers.

Gunawardana and Siscombat (2008) state the importance of FDI rules and regulations of Lao Peoples Democratic Republic (Lao PDR). In this study writer explain that this study can help to potential investors by providing authentic information for right decision making process, those who want to make a huge investment in Lao Peoples

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

Democratic Republic. In this study writer describes that the first regulation of Laos was to join local economic relationship with foreign investment laws of foreign countries. This study shows that current rules and regulations are very useful in terms of creating more foreign direct investment opportunity environment in Laos. In this study writer describes that Government of Laos has taken so many steps to promote foreign investment like there is huge tax benefits and non-tax benefits for different foreign investment projects within the range that name is Special Economic Zones (SEZs), further more there is decrease in import taxes, and decrease in tax on foreign companies profit, which his very low as compare to domestic companies operating within the Laos. In this study writer further explains that there is very wide liberalization in foreign direct investment rules and regulation, permitting more than 100 percent foreign ownership in different sectors of Laos. According to my perception writer puts very hard effort to analyze the foreign direct investment rules and regulation of Loa PDR, overall study is very informative and well written, but if writer put some econometric techniques and apply some statistical tools to check the authenticity of give data, then this study will be more attractive for different researchers.

Majeed and Ahmad (2009) narrate the some important features of host country and the factors of FDI in different developing countries. In this study writer used the board data of 72 developing countries, and the time period take from 1970-2008. In this study writer choose the model which name is General Method of Moments (GMM) method to for selecting the best host countrys characteristics. This study shows that there is positive affect of GDP, Per Capita Income, and Economic Growth of the country on foreign direct investment. In this study writer coherent this result with the attempting conducts of Multi-national Corporations (MNCs). In addition, this study shows that remittances are having very important and convinced affect on foreign direct investment. This study shows that some other determinants like Balance of Payments (BOP) and inflation having a negative effect on foreign direct investment. This study further describes that Multi-national Corporations want to investment in those countries where they look physical reality and good promoting policies regarding trade. This study also

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shows that Military Expenditures give negative impact on foreign direct investment, and this study also determine that there is also negative impact of Real Exchange Rate on foreign direct investment. According to my understanding about this study, it is well written in terms of information and practical usage, but if writer come up with some dependent and independent variables and check the relationships and their effects on each other, then this study will be more valuable for every researcher.

Liu and Daly (2011) come up with idea that FDI in Manufacturing Industry of China with checking the trend of transformation from low Technology to High Technology Manufacturing sectors. In this study writer describe that China liberalize its economy for foreign direct investment in 1979, due to this China is on second position for promoting the enhancement of FDI in the world, and on number first is United States of America to promote the enhancement of foreign direct investment in the world. In this study writer explains that during 1997 to 2008, the manufacturing sector prevailed foreign direct investment inflow in China. This study indicates that when manufacturing activities divided in to two different activities namely low technology and high technology. In this study writer also describes that due to converting its manufacturing sector in to two parts, China is in changeover phase acting foreign direct investment in conventional low technology manufacturing activity to high technology manufacturing surroundings. The main focus of this study is to examine the important factors of foreign direct investment inflow throughout low technology manufacturing industry and high technology manufacturing industry throughout the main three Chinas Geographical Regions. Furthermore, in this study writer describe that empirical inquiry is apply for factors of foreign direct investment in terms of high to low technology inflow by using infrastructure, quality of labor, cost of labor, and market size. In this study writer also elaborate that theoretical base for Chinas conversion from low technology to high technology manufacturing surroundings. According to my perception this study is well managed by writer, with the help of some authentic evidence, and it is very unique topic to research, but if writer put some econometric techniques to clarify the concept of high

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low and low high manufacturing technology with the help of some statistical tools, then this study can be more attractive for different researchers.

Hashim, Munir and Khan (2007) examine that flow of FDI in telecom sector of Pakistan by using an empirical analysis. The main focus of this research is to check the FDI attractiveness in telecom sector of Pakistan and how also check the effects of its determinants on foreign direct investment. In this study writer use the regression analysis taken data in quarter (2000Q1-2006Q4) for identifying the attractiveness of FDI in telecom sector of Pakistan. In this study writer used foreign direct investment taken as dependent variable, and independent variables are market size, competition, literacy rate, foreign trade, and per capita income. This study reveals that all variables having positive and significant impact on FDI in telecom sector of Pakistan. According to my understanding about this article, it is very informative and understandable empirical evidence given by writer, but if writer put some statistics by using updated telecom sector investment information, revenue information, total FDI in Pakistan, and then sector wise FDI in Pakistan by using graphs and table, then it will be more attractive and informative research study for all researchers.

The brief summary of entire literature review on different articles related with impact on the performance of FDI in telecom sector of Pakistan. All studies show that Foreign Direct Investment is very important tool for enhancement of economic growth and economic development of the country. Different studies show that there is a positive impact of foreign direct investment in telecom sector and that leads to economic development and economic growth of the country. Different studies also shows that there are some constraints to reduce the foreign direct investment in telecom sector, these constraints are vary from country to country, and the constraints may be in the form of inflation factor, political instability, differences in cultures, competitions, barriers to entry, literacy level, market size and security problems. Some studies also give few recommendations to enhance the FDI in telecom sector like government should review their policies and regulation regarding for foreign investment.

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

CHAPTER III:

THEORETICAL FRAMEWORK

The theoretical framework of dependent and independent variables are as follow: Figure 1: Theoretical Framework

In this study the dependent and independent variables are taken from the work of (Hashim, Munir, & Khan, 2007).

Dependent Variable
In this research study Foreign Direct Investment in Telecom Sector (FDI TEL) is taken as dependent variable. FDI data in telecom sector has been taken from different Pakistan Telecommunication Authority (PTA) Annual Reports like from (Pakistan Telecommunication Authority, 2008), (Pakistan Telecommunication Authority, 2009), (Pakistan Telecommunication Authority, 2010), and (Pakistan Telecommunication Authority, 2011).

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

Independent Variables
In this research study Market size (MS), Competition (COMP), Literacy Rate (L.R), Foreign Trade (F.T), and Per Capita Income (PCI) are taken as Independent Variables. Independent variables data has been taken from different years Pakistan Economic Survey. These surveys are taken by visiting the Government of Pakistan, Ministry of Finance website from (Ministry of Finance, 2007), (Ministry of Finance, 2008), (Ministry of Finance, 2009), (Ministry of Finance, 2010), (Ministry of Finance, 2011). Market Size is measured as Gross Domestic Product (GDP) of the host country. Competition is measured as total number of telephone, mobile and wireless local loop companies per million of the people. Literacy rate data has been taken in percentage. Foreign trade is the sum of total imports and total exports of the host country in each year. Per capita income data is taken in dollars.

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CHAPTER IV:

TELECOM SECTOR OF PAKISTAN

Telecom sector of Pakistan has a very strong background in terms of success and gain Win-Win situation for different participants like Customers, Investors and Government of Pakistan. FDI in telecom sector of Pakistan was started in 1990, and FDI in this major sector has extraordinary boom after 2000 explain by (Hashim, Munir, & Khan, 2007). Actually this sector was on its flourish in the Government of Ex-President Pervaiz Musharaf give details by (Ch, Faheem, Dost, & Abdullah, 2012). Telecom sector has the potential and capability to attract large amount of FDI in the future. This sector can create job opportunities, reduce poverty, improve skills, and can help in the progress of economic and growth of the country. The telecom sector is flourishing speedily in different parts of the country by the passage of time. This sector is still in developing stage to spread its services in lots of different un-served areas like in many small cities and in different villages. In current situation companies are planning to enhance their services operation in uttermost locations to capture potential customer market for getting maximum profit. In current situation due to raise in competition consumers are getting benefits in terms of good quality and lost cost cellular packages.

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In telecom sector annual cellular subscribers in Pakistan are as shown in below table: Table 1: Annual Cellular Subscribers Annual Cellular Subscribers
Mobilink
200304 200405 200506 200607 200708 200809 200910 201011 Jul, 2011 Aug, 2011 Sep, 2011 Oct, 2011 Nov, 2011 Dec, 2011 Jan, 2012 Feb, 2012 3,215,989 7,469,085 17,205,555 26,466,451 32,032,363 29,136,839 32,202,548 33,378,161 33,545,462 33,468,080 33,412,130 33,537,922 33,932,235 34,213,552 34,703,110 35,296,206

Ufone
801,160 2,579,103 7,487,005 14,014,044 18,100,440 20,004,707 19,549,100 20,533,787 20,569,290 20,624,408 20,681,699 20,828,145 21,069,561 21,368,744 22,019,458 22,423,269

Zong
470,021 924,486 1,040,503 1,024,563 3,950,758 6,386,571 6,704,288 10,927,693 11,594,583 12,045,445 12,591,120 13,168,025 13,572,798 13,874,709 14,423,646 14,951,789

Instaphone
535,738 454,147 336,696 333,081 351,135 34,048 -

Telenor
835,727 3,573,660 10,701,332 18,125,189 20,893,129 23,798,221 26,667,079 26,946,265 27,061,319 27,309,218 27,607,043 28,008,770 28,130,720 28,470,254 28,844,869

Warid
508,655 4,863,138 10,620,386 15,489,858 17,886,736 16,931,687 17,387,798 17,036,690 16,685,299 16,334,277 15,985,299 15,636,754 15,287,861 14,990,190 14,693,616

Total
5,022,908 12,771,203 34,506,557 63,159,857 88,019,812 94,342,030 99,185,844 108,894,518 109,692,290 109,884,551 110,328,444 111,126,434 112,220,118 112,875,586 114,606,658 116,209,749

Source: Source: PTA Annual Reports (2004-05, 2005-06, 2007-08, 2008-09, 2009-10, and 2010-11)

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According to the Pakistan Telecommunication Authority (PTA)- Annual Reports (200405, 2005-06, 2007-08, 2008-09, 2009-10, 2010-11) the current mobile network operators are: Mobilink Ufone Zong Telenor Warid

Mobilink
Mobilink is one the leading cellular and Blackberry service provider in Pakistan. This company is a subsidiary of Orascom Telecom Holding. It has more than 31.6 million subscribers. It has hold market leadership amongst other competitors by integrated technology, the largest portfolio of different value added services in the telecom sector and the strongest brands. It also has a broadband carrier division for next generation and community internet technology with the combination of largest voice and data network with more than 8,000 cell sites in the country elaborate by (Mobilink, 2012).

Ufone
By using Ufone brand name, Pakistan Telecommunication Company Limited (PTCL) started its operations in January 2001. Later PTCL go for privatization, and then Ufone turned to Emirates Telecommunication Corporation Group (Etisalat) in 2006. Ufone has main focus on customer and best offering packages. It has more than 20 million subscribers. Its network coverage is in more than 10,000 locations. Its currently provide the international roaming to more than 288 live operators in more than 160 countries. It also offers largest Pakistans GPRS and BlackBerry Roaming Coverage to more than 200 live operators throughout 122 countries in the world explain by (Ufone, 2012).

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

Zong
Zong is the first international brand of China Mobile. It is launched in Pakistan in 2008. It is referred as China Mobile Pakistan (CMPak). It has more than 14 million subscribers. CMPak has invested more than US$ 700 million in the telecom sector of Pakistan. Zong is devoted on pulling and holding better human resource from throughout Pakistan. It has also provides a working environment that satisfies the professional persons and personal needs of its valuable employees explain by (Zong, 2012).

Telenor
Telenor Pakistan Company is 100% owned by Telenor Group. Telenor Group is an international service provider of high quality voice, data, and different communication services in 11 different markets throughout Europe and Asia. It is a largest mobile operator in the world with the combination of 140 million mobile subscriptions (Q4 2011) and its workforce approximately around 30,000. Telenor Pakistan is the only company that is largely invested by European foreign investor. It acquired a GSM license in 2004. It starts their commercial operations on March 15, 2005. It has more than 28 million subscribers. It has 24% of Market Share making it the Pakistans second largest mobile operator is work out by (Telenor, 2012).

Warid
Warid Telecom is a joint venture between SingTel Group and Abu Dhabi Group. The Abu Dhabi Group came in into a strategic alliance with the help of Singapore Telecom Company. In July 2007 SingTel acquired 30% equity stake in Warid Telecom Pakistan for US$ 758 million. Warid has more than 14 Million subscribers. Abu Dhabi Group is one of the largest business groups in the Middle East and the only one of the largest foreign investor in Pakistan is work out by (Warid, 2012). According to the Pakistan Telecommunication Authority (PTA)-Annual Report 2010-11 that Pakistan economy faced adverse shocks during the fiscal year 2011, adverse shocks in the form of massive floods, and price fluctuation in oil and commodity products. According to an estimate made by the Government that last years floods rub

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out 2% of growth and more than 20 million people endured shift. The economic growth was showed at 2% against the objective of 4% in the fiscal year 2010. In telecom sector revenue increased by 5.4% and tax collection increase by 7.2% in the fiscal year 2011 compare to the previous year.

Teledenity
According to the Pakistan Telecommunication Authority (PTA)-Annual Report 2010-11 that in year 2011 teledensity of the Pakistan was showed at 68.39%. It shows that 6.7% expansion as compared to previous year. As data shows that 95% of mobile sector contribution in total teledensity of the country, and also an increase in mobile insight from 60.4% in fiscal year 2010 to 64.9% in fiscal year 2011. It means that there is improvement of 4.3% in total teledensity. Previous data shows that there is declining trend in Fixed Local Loop teledensity, because of mobile substitution and currently it stands at 1.93% in fiscal year 2011 as compared to 2.1% from last year, data shows that there is a reduction of 0.17%. On the other hand Wireless Local Loop subscribers have an increasing trend but harmonious increase in population is continuing the teledensity of WLL services at 1.6% for the past year, this teledensity related all information is elaborate by (Pakistan Telecommunication Authority, 2011)

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

Figure 2: Teledensity

Source: PTA Annual Report 2010-11 Report,

Telecom Contribution to Exchequer


According to the PTA PTA-Annual Report 2010-11 that the telecom sector has a 11 substantial contribution to the national treasury put over Rs. 100 billion, on average, for billion every year. Telecom sector data shows that the amount of Rs. 627 billion has been put in the national treasury during the last six years. Telecom sector data also shows that there is s highest contribution to the national treasury in the fiscal year 2011 approximately Rs. 117 billion by different telecom companies operating within the Pakistan. Pakistan Telecommunication Authority also put in treasury on Pakistan aroun 109.1 billion that around shows 7% growth during the fiscal year 2011. The PTA has total contribution in national treasury is Rs. 72 billion during the past six years which consist of Initial and Annual License Fee, USF, Annual Spectrum and Research and Development (R&D) fund Develop contributions. Telecom sector data also shows that there is a small decrease of Rs. 2 billion was found as last year in Pakistan Telecommunication Authority deposits

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

outstanding to non-payment of APC for USF by a very elite telecom companies payment companie outstanding to litigations in the Court of Law of Pakistan is elaborate by (Pakistan Telecommunication Authority, 2011). 2011) Figure 3: Telecom Contribution to Exchequer :

Source: PTA Annual Report, 2010 2010-11

Taxes
According to the PTA Annual Report 2010-11 that Telecom Sector is a main 11 contributor of Tax to Government of Pakistan. This sector has share of 93% in total GST/FED collection from the services sector of Pakistan. Telecom sector dat shows that data during the fiscal year 2011 different telecom companies added Rs. 52.6 billion in the shape of GST/FED, it is 20% greater than from last fiscal year 2010 which is Rs. 44 billion contributed. Telecom Sector data shows that cellular services contributed Rs. 44.9 con

35

Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

billion in fiscal year compared to Rs. 36.2 billion fiscal year 2010 that shows an increase of 25% during one year is explain by (Pakistan Telecommunication Authority, 2011). 2011) Figure 4: GST/FED Collected

Source: PTA Annual Report, 2010 2010-11

Telecom Revenues
According to the PTA - Annual Report 2010-11 that Telecom Sector revenue 11 achieved wholly high during the fiscal year 2011. This revenue is now around Rs. 363 billion with promotion of 5.4% as compared to the last year. Telecom sector data shows that there is a highest share of cellular sector in telecom revenues. Throughout fiscal year 2011, the cellular revenues increased by 11% that leads to Ra. 252,761 million as compare with Rs. 236,047 million from past year. Telecom sector shows that there is mpare increase in revenue due to mobile services, as some other services exclude WLL have described that decrease in their total telecom revenues is explain by (Pakistan Telecommunication Authority, 2011). 2011)

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

Figure 5: Telecom Revenues

Source: PTA Annual Report, 2010 2010-11

Telecom Investment
According to the Pakistan Telecommunication Authority (PTA)-Annual Report (PTA) 2010-11 that investment in telecom sector is very essential tool for the advancement in 11 technology and for the innovative product. Telecom data shows that different cellular companies have invested above US$ 12 billion in constructing the infrastructure and s some other projects during the last six years. Telecom sector data shows that the main contributor is cellular mobile sector that invested US$ 495.8 million in the telecom sector and USF invested Rs. 3.5 billion in different unmerited areas. nd

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

Table 2: Telecom Investment Telecom Investment (US $ million)


Cellular 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 1,420.90 2,584.50 2,337.70 1,229.75 908.8 358.6 LDI 50.5 602.8 403.9 276.75 183.1 108.8 LL 0.3 40.6 342.1 57.37 22.5 18.2 WLL 259.4 747 52.8 82.11 23 10.2 Total 1,731.10 3,974.80 3,136.40 1,646.98 1,137.51 495.81

Source: Source: PTA Annual Reports (2004-05, 2005-06, 2007-08, 2008-09, 2009-10, and 2010-11)

Previous telecom data also shows that FDI has a boosting trend, and FDI in the telecom companies was greater than 30% of the total FDI of the country during the past six years. If we look on the fiscal year 2011, telecom sector pulled over US$ 79 million FDI in the Pakistan that is about 5% of the total foreign direct investment that added up in Pakistan. Different investigation shows that there is a need of more foreign investment to boost these amounts in the coming future. Some analysts predict that by auction of 3G licenses that bring more FDI in Pakistan. Some very useful recommendations are like better economic situation and security conditions in the Pakistan will more encourage the foreign investors to bring large capital into the country is explain by (Pakistan Telecommunication Authority, 2011).

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

Figure 6: Foreign Direct Investment

Source: PTA Annual Report, 2010 2010-11

Telecom Imports
According to the PTA PTA-Annual Report 2010-11 that imports in telecom sector 11 showed an increasing trend as these move forward to US$ 766.3 million from US$ 725.7 million last year. Telecom sector data shows that since bringing relief in regulatory duty on different imports of cellular mobile handsets. It shows that different cellular mobile ferent imports increased to US$218 million in the fiscal year 2011 as compared to US$ 169 million in the last year. It also shows that telecommunication apparatuss import that includes machinery and fixed wireless terminals decreased to US$ 548 million in fiscal cludes

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

year 2011 as compared to US$ 556 million in the last year is explain by (Pakistan Telecommunication Authority, 2011) Figure 7: Telecom Imports

Source: PTA Annual Report, 2010-11

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

CHAPTER V:

METHODOLOGY

FDI in telecom sector of Pakistan is very essential for the economic stabilization and economic growth and development of Pakistan. According to current situation there is need to enhance the foreign direct investment by taking different steps like liberalization of foreign investor to invest in Pakistan, cheap labor availability, huge tax incentives, beneficial return on investment and investment policies should be liberalize. Hashim, Munir, and Khan (2007) explain that foreign direct investment in telecom sector was initiated in 1990. Also there is a great increase of FDI in telecom sector after 2000. The model is used in this study is pick from the work of (Hashim, Munir, & Khan, 2007). In this study time series data have been taken from 2001-2011, keeping in view the availability of data. In this study functional equation is used that is based on theoretical formulation that is taken from the work of (Hashim, Munir, & Khan, 2007). This equation is given in Log-Linear Form as: LFDI TEL = 0 + 1 LMS + 2 LCOMP + 3 LLR + 4 LFT + 5 LPCI +

Where FDI TEL MS COMP L.R FT PCI = = = = = = Foreign Direct Investment in Telecommunication Sector Market Size Competition Literacy Rate Foreign Trade Per Capita Income

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

It is supposed that

L FDI TEL / L 1MS > 0 L FDI TEL / L 2COMP > 0 L FDI TEL / L 3L.R > 0

L FDI TEL / L 4FT > 0 L FDI TEL / L 5PCI > 0

Specification of Variables
In this study the dependent and independent variables are also taken from the work of (Hashim, Munir, & Khan, 2007).
Dependent Variable

In this research study Foreign Direct Investment in Telecom Sector (FDI TEL) is taken as dependent variable. FDI data in telecom sector has been taken from different Pakistan Telecommunication Authority (PTA) Annual Reports like from (Pakistan Telecommunication Authority, 2008), (Pakistan Telecommunication Authority, 2009), (Pakistan Telecommunication Authority, 2010), and (Pakistan Telecommunication Authority, 2011).

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

Table 3: Foreign Direct Investment in Telecom Sector Foreign Direct Investment in Telecom Sector (US $ Million)
Years 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 FDI in Telecom 6.1 13.5 207.1 494.4 1,905.10 1,824.20 1,438.60 815 373.62 79.2 Total FDI 484.7 798.0 949.4 1,524.00 3,521.00 5,140.00 5,410.00 3,720.00 2,199.44 1,574.00 Telecom (%) Share 1.3 1.7 21.8 32.4 54.1 35.5 26.6 21.9 17.0 5.0

Source: Source: PTA Annual Reports (2004-05, 2005-06, 2007-08, 2008-09, 2009-10, and 2010-11)

Explanatory Variables

In this research study Market size (MS), Competition (COMP), Literacy Rate (L.R), Foreign Trade (F.T), and Per Capita Income (PCI) are taken as Independent Variables. Independent variables data has been taken from different years Pakistan Economic Survey. These surveys are taken by visiting the Government of Pakistan, Ministry of Finance website from (Ministry of Finance, 2007), (Ministry of Finance, 2008), (Ministry of Finance, 2009), (Ministry of Finance, 2010), (Ministry of Finance, 2011).
Market Size is measured as Gross Domestic Product (GDP) of the host country. Competition is measured as total number of telephone, mobile and wireless local loop companies per million of the people. Literacy rate data has been taken in percentage. Foreign trade is the sum of total imports and total exports of the host country in each year. Per capita income data is taken in dollars.

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

Table 4: Independent Variables Data


Competition (No. of telephone, Mobile, & Wireless Local Loop) (%) 3.7 4.3 6.25 11.89 26.26 44.06 58.90 62.00 64.10 68.4

Years

Market Size (GDP in %) 3.1 4.7 7.5 9.0 5.8 6.8 3.7 1.7 3.8 2.4

Literacy Rate (%)

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

50.50 51.60 54.00 53.00 54.00 55.00 56.00 57.40 57.70 59.70

Foreign Trade {Sum of total imports and exports} ($ Million) 18,574 22,222 26,000 33,154 41,012 44,267 55,824 50,868 41,626 49,337

Per Capita Income ($)

503 586 669 733 836 921 1,042 1,046 1,073 1,254

Source: Source: PTA Annual Reports (2004-05, 2005-06, 2007-08, 2008-09, 2009-10, and 2010-11), Pakistan Economic Survey (2006-07, 2007-08, 2008-09, 2009-10, 2010-10)

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

CHAPTER VI:

RESULTS AND DISCUSSION

The empirical investigation on the dependent variable and independent variables of this research study that is impact on the performance of FDI in telecom sector of Pakistan uses time series data quarterly and time period is taken from 2001-2011. Different descriptive statistics, correlation between LFDI TEL and other variables, Augmented Dickey Fuller (ADF) Test results, and regression results are given below: Table 5: Descriptive Statistics (2001-2011)
LFDI Mean Median Maximum Minimum Std. Dev. Skewness Kurtosis 5.527854 6.063292 7.552290 1.808289 2.022722 -0.773796 2.286253 LMS 1.461530 1.441282 2.197225 0.530628 0.527949 -0.287202 2.096170 LCOMP 3.071762 3.526800 4.225373 1.308333 1.192050 -0.443318 1.505302 LLR 4.004107 3.998159 4.089332 3.921973 0.052142 0.030851 2.081908 LFT 10.49426 10.62905 10.92996 9.829518 0.376438 -0.608999 1.993170 LPCI 6.726486 6.777044 7.134094 6.220590 0.295533 -0.359430 1.950055

Table 6: Correlation between LFDI TEL and Other Variables LFDI


LFDI LMS LCOMP LLR LFT LPCI 1.000000 0.222007 0.691961 0.475496 0.790632 0.623206

LMS
0.222007 1.000000 -0.396846 -0.471406 -0.292425 -0.391934

LCOMP
0.691961 -0.396846 1.000000 0.902063 0.965104 0.974522

LLR
0.475496 -0.471406 0.902063 1.000000 0.846119 0.963885

LFT
0.790632 -0.292425 0.965104 0.846119 1.000000 0.947983

LPCI
0.623206 -0.391934 0.974522 0.963885 0.947983 1.000000

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

Table 7: Result of ADF Test


Variables FDI Tel Level First difference Level/ Difference Without trend -2.441809 -3.462728 Conclusion I(I)

MS

Level First difference

-1.455077 - 3.036983

I(I)

COMP

Level First difference

-3.883005 -5.383422

I(I)

LR

Level First difference

-0.316471 -4.052053

I(I)

FT

Level First difference

-2.019747 -3.383422

I(I)

PCI

Level First difference

-1.607907 -4.248516

I(I)

95% critical value for ADF Statistics for all variables: -3.0039(without trend)

Table 8: Regression Results (2001-2011)


Variable Constant term L Market Size L Competition L Literacy L Foreign Trade L Per Capita Income R2 Adjusted R DW test
2

Coefficient -202.1984 2.187963 2.389424 67.94256 11.40031 28.91530 0.978550 0.951738 2.382377

t-statistics -3.486824 5.985267 3.004119 2.069774 5.479523 4.278338

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

The empirical investigation on the dependent variable and independent variables of this research study that is impact on the performance of FDI in telecom sector of Pakistan uses time series data on quarterly basis and time period is taken from 20012011Q. Different descriptive statistics and correlation between LFDI TEL and other variables are shown in table 5 and table 6 respectively. In order to check the

consolidation of dependent and independent variables, ADF Test (Table 7) are apply for unit roots to determine that the dependent and independent variables are completed to be incorporated of the same order. All ADF test shows that all dependent and independent variables have static in the levels of 95% without change. All dependent and independent variables are in first difference. Therefore from the result of Unit Root Test we reach on conclusion that all of the dependent and independent variables are incorporated of same result.

All Regression results (Table 8) shows that all dependent and independent variables are detected statistically substantial with positive sign at 1% significance level. Further they reflect that FDI Tel is influenced because of market size, competition, literacy rate, foreign trade and per capital income. Due to increase in market size, FDI will flow in telecom sector showing the positivity on the part of the economy. Similarly, competition will further generate FDI to promote in the telecom sector. Literacy rate indicates that the population in the economy is more understandable about the usage of telecommunication sector and it help to attract FDI in this sector. Likewise, foreign trade and per capita income are also positively correlated to bring FDI in telecom. R and adjusted R are 0.98 and 0.95 respectively showing the regression results clearly explain its variable.

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

CHAPTER VII: CONCLUSION


The key focus area of this research study was impact on the performance of FDI in Telecom Sector of Pakistan. There is no doubt that nobody can neglect the essence of FDI in telecom sector. There are number of researches are going on in whole world on the various aspects of telecom sector and FDI in telecom sector. Different researchers shows that the number of reasons to FDI reduction in telecom sector of Pakistan like they explain some reasons namely competition, regulatory reforms, strict government policies, political instability, terrorism, unsecure environment, market performance, economic conditions, exchange rate fluctuation, tax burden etc. In this research study FDI in telecom sector of Pakistan taken as dependent variable and Market size, Competition, Literacy Rate, Foreign Trade, and Per Capita Income are taken as Independent Variables. In this study Secondary data is used. For the aim of investigation time series data has been selected (2001Q-2011Q4) on quarterly basis. To check and analyze the dependent and independent variables relationship and changing trend between dependent and independent variables, the regression analysis is applied, and also other statistical tool like Augmented Dickey Fuller (ADF) Test is used in this research study. All Regression results show that all dependent and independent variables are detected statistically substantial with positive sign at 1% significance level. This shows that increase of FDI in telecom sector of Pakistan with the enhancement in literacy rate and per capita income of the country and vice versa. The results also show that by the boost in foreign and domestic trade demand for telecom innovative services have as well heightened to reduce transaction cost and as fast and relatively low price communication. The results as well show that by the increase in competition has promote urge foreign investors to build huge investment to cope with growing demand of rising population, it also indicate that they have increased their investment funds in both urban and rural area of the Pakistan. Hence it is ended that market size, competition, literacy rate, foreign trade and per capita income, all these independent variables have real strong affect and are acting crucial role in an enhancing the FDI in telecom sector of Pakistan. In final word, this study terminates with focusing of impact on the performance of FDI in telecom Sector of Pakistan.

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

CHAPTER VIII: RECOMMENDATIONS


After an in-depth analysis of data related with impact on the performance of Foreign Direct Investment (FDI) in telecom sector of Pakistan, the some useful recommendations are as following: In order to attract Foreign Direct Investment (FDI) in Telecom Sector of Pakistan, Government of Pakistan should provide a lot of satisfaction relating rewards to make foreign investors agree for transfer their technology to Pakistan. Given that the economic and security conditions of the country is not well, Government should take some steps to improve the economic and security environment of the country that leads to attract foreign investment in the country. In the light of FDI reduces due to the political instability, Government should restructure the political environment and then ensure to foreign investor that they can transfer their technology in stable political environment of the country. In order to enhance the FDI, Government should focus on market development and healthy competition within secure and stable environment of the country. For promoting the FDI, Government should control the terrorism that will bring peace and satisfaction in the country as well as more foreign investment. To enhance the FDI, Government should amend the existing law and order, and best imposed to assist the rights and intellectual properties of foreign investors. In order to pull FDI, Government should provide some financial grants like tax benefits, cash benefits and specific grants. In the light of attracting the FDI, Government should concentrate on amending the infrastructure, skill improvement, and making strategy to cope with requirements and anticipation of foreign investors. To attract the FDI, Government should attempt to meliorate the general business environment of the country by modifying the administrative barriers. For enhancement of FDI, Government should allow more 3G Licenses for the foreign telecommunication companies in the future.

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

For boosting up the FDI, Government should allow different Cellular Mobile Companies to participate in given competitive environment of the country. To increase the FDI, Government should build up strong R&D team for attracting, recommending and researching, the future trends of FDI in telecom sector of Pakistan.

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APPENDICES
Appendix A

Source: PTA Annual Report, 2010 2010-11

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

Appendix B:

Source: PTA Annual Report, 2010-11

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

Appendix C

Source: PTA Annual Report, 2010 2010-11

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

Appendix D

Source: PTA Annual Report, 2010 2010-11

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

Appendix E

Source: PTA Annual Report, 2010 2010-11

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Impact on the performance of Foreign Direct Investment (FDI) In Telecom Sector of Pakistan Syed Aamir Abbas 01-221111-100 MBA-V (C)

Appendix F

2010-11 Source: PTA Annual Report, 2010

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