Stock Market Development, Institutional Quality and Foreign Direct Investment nexus in Pakistan

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Analysis reveals how institutional quality and macroeconomic variables influence foreign direct investment in Pakistan.

Stock market development positively correlates with foreign direct investment and government effectiveness in Pakistan.
Macroeconomic factors such as portfolio investment and exchange rate significantly affect stock market development.
Institutional quality factors like rule of law and control of corruption also impact stock market development positively.
Negative influences on stock market development include inflation rate and political stability, particularly affecting foreign direct investment.

Saeed et al. (2025) studied this question.

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