Measurement of Cost of Capital for Foreign Direct Investment in Pakistan: A Neoclassical Approach

Capital can move inside and outside the boundaries of a country in search of the highest financial return and greatest security for its operation in the host regions. High return from investment is linked with the incentive mechanism offered by the host country in attracting FDI to fill the investment gap and diffusion of other skills. To attract the foreign investors, the successive governments in Pakistan, offered various investment incentives in the form of tax concessions (tax expenditure) and direct expenditure on infrastructural provisions. The taxation policy of Pakistan has great relevance for Transnational Corporation’s (TNC) involvement in production activities. It is perceived to be a significantly influential factor in determining the inflow of foreign investment through the cost of capital and the resulting after tax return. Stimulating foreign investment, mainly through the large TNCs, requires cost minimising devices, which are reflected in fixed cost of a long-term investment project. The cost of fixed assets in such projects depends upon the rate of return, the price of capital goods and, most importantly, the tax treatment of generated income. Foreign investors are generally pursuing two sets of objectives that are related to their decision to invest. First, they prefer for locational advantages like market size, access to raw material and the availability of skilled labour. Secondly, they have their concern with the incentives offered by the host countries through their fiscal policies. These policies attract the investment considerations of the foreign investors. TNCs search the second set of objectives only if the first set is fulfilled. This paper uses the Jorgenson’s (1963, 1967) Neoclassical Investment Model to explore the cost implications that are concerned with the importing capital and the return after being treated for fiscal provisions.

The Determinants of Foreign Direct Investment in Pakistan: an Empirical Investigation

The changing modes of international transactions and the cross-border mobilisation of factor resources, in pursuance of transnational production, constitute new dimensions for sustained economic growth. Foreign Direct Investment (an influential element of this process) is defined as the source of acquisition of managerial control by a business enterprise of a foreign country over a business activity in a host country [Graham (1982)]. The changing perceptions and more attractive policies of the host developing nations have changed the destinations of FDI flows from industrially developed countries to high growth developing centres. FDI stock held by developing countries has risen from $132.95 billion in 1980 to$ 1438.48 billion in 1999. Their share in inward stock has reached to 30.14 percent in 1999 as against 26.2 percent in 1980. FDI inflows during this period were raised from $4.42 billion to$ 208.0 billion, at an annual growth rate of 22.5 percent while GDP growth rate for that period was 3.9 percent. FDI brings the most needed capital fund, advanced production technique, snobbish managerial skills, advertising and marketing expertise, global links and the controversial phenomenon of “transfer pricing”.1 Pakistan, the world’s 7th most populated country with 140 million people, a relatively high growth rate of GDP (averaging around 6 percent), with a significant stock of natural resources and a variety of investment provisions has remained unattractive for FDI inflows.

Measurement of Cost of Capital for Foreign Direct Investment in Pakistan: A Neoclassical Approach

Capital can move inside and outside the boundaries of a country in search of the highest financial return and greatest security for its operation in the host regions. High return from investment is linked with the incentive mechanism offered by the host country in attracting FDI to fill the investment gap and diffusion of other skills. To attract the foreign investors, the successive governments in Pakistan, offered various investment incentives in the form of tax concessions (tax expenditure) and direct expenditure on infrastructural provisions. The taxation policy of Pakistan has great relevance for Transnational Corporation’s (TNC) involvement in production activities. It is perceived to be a significantly influential factor in determining the inflow of foreign investment through the cost of capital and the resulting after tax return. Stimulating foreign investment, mainly through the large TNCs, requires cost minimising devices, which are reflected in fixed cost of a long-term investment project. The cost of fixed assets in such projects depends upon the rate of return, the price of capital goods and, most importantly, the tax treatment of generated income. Foreign investors are generally pursuing two sets of objectives that are related to their decision to invest. First, they prefer for locational advantages like market size, access to raw material and the availability of skilled labour. Secondly, they have their concern with the incentives offered by the host countries through their fiscal policies. These policies attract the investment considerations of the foreign investors. TNCs search the second set of objectives only if the first set is fulfilled

The Determinants of Foreign Direct Investment in Pakistan: an Empirical Investigation

The changing modes of international transactions and the cross-border mobilisation of factor resources, in pursuance of transnational production, constitute new dimensions for sustained economic growth. Foreign Direct Investment (an influential element of this process) is defined as the source of acquisition of managerial control by a business enterprise of a foreign country over a business activity in a host country [Graham (1982)]. The changing perceptions and more attractive policies of the host developing nations have changed the destinations of FDI flows from industrially developed countries to high growth developing centres. FDI stock held by developing countries has risen from $132.95 billion in 1980 to$ 1438.48 billion in 1999. Their share in inward stock has reached to 30.14 percent in 1999 as against 26.2 percent in 1980. FDI inflows during this period were raised from $4.42 billion to$ 208.0 billion, at an annual growth rate of 22.5 percent while GDP growth rate for that period was 3.9 percent

The Only Eye Study (OnES): a qualitative study of surgeon experiences of only eye surgery and recommendations for patient safety

OBJECTIVE: Performing surgery on patients with only one seeing-eye, where complications may result in catastrophic vision loss, presents unique challenges for the ophthalmic care team. There is currently no evidence regarding how surgeons augment their care when treating only eye patients and no guidelines for how these patients should be managed in hospital eye services. This study aimed to explore ophthalmic surgeons' experiences of only eye surgery and perceptions of current practice. DESIGN AND PARTICIPANTS: Ten ophthalmic surgeons were asked to relate their experiences and views on performing only eye surgery in indepth, semistructured interviews. Interviews were audio-recorded and transcribed. Qualitative data were subjected to thematic analysis to identify key themes. SETTING: Hospital eye service. RESULTS: Five key themes emerged relating to surgeons' experiences and perceptions of only eye surgery: (1) differences in approach to consent, (2) strategies for risk reduction, (3) unmet training needs, (4) value of surgical mentor and (5) emotional impact of unsuccessful outcomes. Recommendations for improving the surgical journey for both the patient and the surgeon related primarily to better recognition and understanding of the complexities inherent with only eye surgery. CONCLUSIONS: Outcomes of only eye surgery may be improved through a number of methods, including development of purpose-designed training fellowships, adoption of stress-reducing strategies and enhancement of available support services. The findings identify emerging themes unique to only eye surgery and the need for guidelines on the provision of care for these high-stakes surgical patients

Input Efficiency of Financial Services Sector: A Non-parametric analysis of Banking and Insurance Sectors of Pakistan

Purpose In an attempt to enrich the literature of the efficiency of financial services sector with holistic perspective, this study aims to empirically investigate the input efficiency of banking and insurance sectors with further probe into Islamic segments of these sectors in Pakistan.Design/methodology/approach This study measures the technical, allocative, cost, and scale efficiencies of banking and insurance firms in our sample using the non-parametric frontier method, data envelopment analysis (DEA).Findings The findings show that, on average, the allocative efficiency of the overall Islamic financial services sector has increased during the period of study and has also remained well above their conventional counterparts. The study also revealed that, insurance sector is more technically efficient than banking sector. Finally, the study also found that overall efficiency of financial sector can also be improved by exchanging experts between two sectors.Originality/value The results of this research study provide empirical findings as to how two segments of Financial Services Sectors had fared in the competitive environment from 2007 to 2015

Fuzzy Query Routing in Unstructured Mobile Peer-to-Peer Networks

© 2016 IEEE. Due to the disparity between the peer-to-peer (P2P) and the physical networks, we study the challenging problems of mobile routing in unstructured P2P networks over mobile ad hoc networks (MANETs). To route queries and objects of interest, the existing mobile P2P protocols widely adopted an inflexible techniques which experience a relatively high delivery time due to remarkable network traffic, nodes mobility and broken links. The bond between routing and mobility is crucial to obtain efficient searching in mobile P2P network. To solve this problem, we proposed fuzzy search controller [1] which reduced search time but due to peer mobility the protocol causes low hit rate and high overhead. Thus, this article proposes novel fuzzy controller based possibilistic routing for unstructured mobile P2P networks to reduce routing time. The possibilistic routing is based on ultrapeer mobility, active time and location. The inference rules are defined to select the best route to forward query walker. Simulations show that the fuzzy search controller gives better performance than the competing protocols in terms of reducing response time and increasing hit rate in different mobility scenarios

Consumption of Family Takaful affected by Microeconomic Factors: A Case Study of Islamic insurance Takaful in Pakistan

This study empirically verifies the link between macroeconomic variables (i.e. income per capita, savings, inflation, stock and index) with the demand for Family Takaful in the context of Pakistan using time-series data from 2006 to 2016 of Pak-Qatar Family Takaful Company and Dawood Family Takaful Company. It was concluded from this study that per capita income is a strong forecaster of Family Takaful demand in Pakistan, while other macro-economic factors such as KSE composite index has significant and positive relationship with Takaful demand in Pakistan. The other three variables i.e. saving, interest rate and inflation are having insignificant relationship with Family Takaful demand in Pakistan

An alternative explanation for the density depletions observed by Freja and Viking satellites

In this paper, we have studied the linear and nonlinear propagation of ion acoustic waves in the presence of electrons that follow the generalized (r,q) distribution. It has been shown that for positive values of r, which correspond to a flat-topped electron velocity distribution, the nonlinear ion acoustic waves admit rarefactive solitary structures or density depletions. It has been shown that the generalized (r,q) distribution function provides another way to explicate the density depletions observed by Freja and Viking satellites previously explained by proposing Cairns distribution function.In this paper, we have studied the linear and nonlinear propagation of ion acoustic waves in the presence of electrons that follow the generalized (r,q) distribution. It has been shown that for positive values of r, which correspond to a flat-topped electron velocity distribution, the nonlinear ion acoustic waves admit rarefactive solitary structures or density depletions. It has been shown that the generalized (r,q) distribution function provides another way to explicate the density depletions observed by Freja and Viking satellites previously explained by proposing Cairns distribution function