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

Najid Ahmad (), Muhammad Hayat (), Muhammad Luqman () and Shafqat Ullah ()
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Najid Ahmad: Bahauddin Zakariya University, Multan
Muhammad Hayat: Bahauddin Zakariya University, Multan
Muhammad Luqman: Bahauddin Zakariya University, Multan
Shafqat Ullah: Islamia University Bahawalpur

European Journal of Business and Economics, 2012, vol. 6, issue 0, 20-21 volume1: 6

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.

Keywords: Gross domestic productForeign direct investment; Labor force; Domestic capital (search for similar items in EconPapers)
JEL-codes: O10 O19 O41 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:aad:ejbejj:v:6:y:2012:i:0:p:20-21

DOI: 10.12955/ejbe.v6i0.137

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