Analyzing the Impact of Foreign Capital Inflows on Domestic Savings in Pakistan: A Comprehensive Time Series Investigation

Maria Batool, Muhammad Ramzan Sheikh (), Asad Abbas and Sana Ashraf
Additional contact information
Maria Batool: Bahauddin Zakariya University, Pakistan.
Muhammad Ramzan Sheikh: Bahauddin Zakariya University, Pakistan.
Asad Abbas: COMSATS University Islamabad, Vehari Campus, Pakistan.
Sana Ashraf: GGPS, Muhammad Pur Khokha, Pakistan.

Journal of Economic Sciences, 2023, vol. 2, issue 2, 93-112

Abstract: This research delves into the ramifications of foreign capital inflows on domestic savings within the context of Pakistan. Utilizing annual time series data spanning from 1972 to 2022, this study employs the Auto Regressive Distributed Lag (ARDL) methodology alongside causality analysis. The findings underscore that factors such as labor force participation rate, gross fixed capital formation, deposit interest rate, foreign direct investment, trade, GDP growth, and foreign remittances exert a favorable influence on gross domestic savings over the long term. Conversely, variables encompassing age dependency, external debt stock, and net official development assistance exhibit a detrimental impact on gross domestic savings. Furthermore, the outcomes derived from the Granger causality test reveal the absence of causal relationships between foreign direct investment, remittances, trade, external debt, and gross domestic savings. Notably, unilateral causality is identified solely between net official development assistance and gross domestic savings.

Keywords: Foreign Aid; FDI; Foreign Debt; ForeignRemittances; Savings; ARDL; Causality Analysis (search for similar items in EconPapers)
JEL-codes: E21 F24 F35 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
https://jesciences.com/index.php/jes/article/view/47/23 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:azm:journl:v:2:y:2023:i:2:p:93-112

DOI: 10.55603/jes.v2i2.a2

Access Statistics for this article

More articles in Journal of Economic Sciences from Federal Urdu University Islamabad, Department of Economics
Bibliographic data for series maintained by Dr. Ihtsham Ul Haq ().