International Journal of
Innovation, Management and Technology

Abstract— This paper examines the argument that developing economies are not in a win-win situation while engaging in free trade because such international competition prevents the emergence and growth of domestic entrepreneurial class. For this purpose, we developed two different models to examine the formation of entrepreneurial class and domestic entry in Pakistan using time series data from 1980 to 2017. Findings of the study indicate that foreign direct investment positively impacts the formation of entrepreneurial class and facilitate domestic entry in the country. Study shows that investment in research and development, institutional environment, and human resource development through technical and vocational education can upshot huge potential gains from foreign direct investment and international trade. Additionally, it can improve institutional environment to facilitate the absorption, accumulation of knowledge, technology, and spillovers arising along-with FDI inflows. Moreover, the study provides context-specific insights for policy-planners in developing counties to have more from the FDI inflows and may provide nascen

Index Terms— Foreign direct investment, formation of entrepreneurial class, institutional environment, spillovers.

Rabia Mazhar and Zou Wei are with College of Public Administration, Nanjing Agricultural University, Nanjing 210095, Jiangsu, P. R. China (email: Rabi.mazhar@hotmail.com, Zw@njau.edu.cn).

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Cite: 881-NB0024, " Foreign Direct Investment, International Trade, and Formation of Entrepreneurial Class," International Journal of Innovation, Management and Technology vol. 11, no. 3, pp. 88-93, 2020.

Copyright © 2020 by the authors. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).