GOOD GOVERNANCE, PANDEMIC AND FOREIGN DIRECT INVESTMENT MANAGEMENT IN SOUTH ASIAN COUNTRIES: A DYNAMIC PANEL DATA ANALYSIS

Abstract

The study focuses on FDI inflows to South Asian countries between pre-COVID-19 and COVID-19 periods and the relationship between FDI inflows and good governance in South Asian countries over the period of 1990 to 2021. T test, panel co-integration test and dynamic panel data analysis are employed to accomplish the objectives of the study. The impact of COVID-19 on South Asia’s FDI inflows is found to be significant and particularly inflow of FDIs has experienced a significant drop in all other South Asian countries, except India during the pandemic period. Additionally, the study confirms a positive relationship between good governance and inflow of FDIs in South Asian countries. Hence, the present study strongly recommends improving infrastructure facilities while ensuring a higher level of good governance to attract more FDI to the countries in South Asian region.