Foreign Direct Investment Inflows and Financial Modernization: A Study of BRICS

Authors

  • Muhammad Adnan (Correspondent Author) Lecturer: Management Sciences, Sukkur IBA University
  • Khair Bux Mangrio Lecturer: Economics, Sukkur IBA University
  • Faisal Zulifqar Lecturer: Management Sciences, Sukkur IBA University
  • Majid Hashim Lecturer: Management Sciences, Shaheed Zulfikar Ali Bhutto Institute of Science and Technology, Hyderabad, Pakistan

Abstract

This study explores the relationship between the Inward Foreign Direct Investment (FDI) and the financial modernization of the recipient economy. This study uses 30 years of data ranging from 1994 to 2023. Panel ARDL is used to calculate long-term and short-term results. The results show the positive and significant effect of FDI inflows on financial modernization. The results are found to be consistent in long term as well as in the short term although the effect in long term is slightly less significant compared to the short-term coefficient. Further, the country-specific analysis also suggests that significant coefficients are consistent across all cross-sections. For robustness of the results, this study incorporated FMOLS and the results are positive and significant for inward FDI. This study has significant implications for policymakers regarding the inflow of foreign direct investment. The policies must be supporting the FDI inflows for the hosting country.

Keywords: Financial Modernization, Foreign Direct Investment, Financial Development, Economic Development, Trade Liberalization

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Published

2026-04-30

How to Cite

Muhammad Adnan (Correspondent Author), Khair Bux Mangrio, Faisal Zulifqar, & Majid Hashim. (2026). Foreign Direct Investment Inflows and Financial Modernization: A Study of BRICS. `, 5(2), 455–464. Retrieved from https://assajournal.com/index.php/36/article/view/1685

Issue

Vol. 5 No. 2 (2026): Advance Social Science Archive Journal

Section

Articles