The Causal Links Between Foreign Direct Investment And Economic Growth In Pakistan

  • Najid Ahmad Bahauddin Zakariya University, Multan
  • Muhammad Farhat Hayat Bahauddin Zakariya University, Multan
  • Muhammad Luqman Bahauddin Zakariya University, Multan
  • Shafqat Ullah Islamia University Bahawalpur
Keywords: Gross domestic product, Foreign direct investment, Labor force, Domestic capital

Abstract

This paper investigates the relationship between foreign direct investment and economic growth in Pakistan. The co-integration and error correction model is used to show the relationship between foreign direct investment and gross domestic product in Pakistan. Gross domestic product is taken as dependent variable while foreign direct investment, labor force and domestic capital as independent variables. The results suggest that there is a positive relation between foreign direct investment and gross domestic product in short as well as long run. If we want to make economic progress then there is a need to invite foreign investors because foreign direct investment increases GDP that is economic growth.

References

Abdul Khaliq, I. N. (2007). Foreign Direct Investment and Economic Growth: Empirical Evidence from Sectoral Data in Indonesia. Indonesia Journal and Review, 01-27.

Abu NURUDEEN, O. W. (2010). On The Causal Links Between Foreign Direct Investment And Economic Growth In Nigeria, 1970-2008: An Application Of Granger Causlity And Co-Integration Techniques. Romanian Statistical Review .

Niazi, G, S, K (2011). Does an Inflation and Growth of a country affect its Foreign Direct Investment? Journal of Management, Economics & Finance, 84-90.

Falki, N. (2009). Impact of Foreign Direct Investment on Economic Growth in Pakistan. International Review of Business Research Papers, 110-120.

Hussein, M. A. (2009). Impacts of Foreign Direct Investment on Economic Growth in the Gulf Cooperation Council (GCC) Countries. International Review of Business Research Papers, 362-376.

Iqbal Mahmood, M. E. (2011). Macroeconomic variables and FDI in Pakistan. European Journal of Scientific Research, 388-393.

Zeshan Atique, M. H. (2004). The Impact of FDI on Economic Growth under Foreign Trade Regimes: A Case Study of Pakistan. The Pakistan Development Review, 717-718.

Mehar, Y. (2008). Economic Evalution of Foreign Direct

Investment in Pakistan. Pakistan Economic and Social Review, 37-56.

Published
2012-09-01
Section
Articles