Nexus among foreign direct investment, domestic investment, financial development and economic growth: a NARDL approach in Pakistan

Hafiz M. Sohail and Zengfu Li

International Journal of Economics and Business Research, 2023, vol. 25, issue 2, 249-269

Abstract: One of the most recent issues has been the relationship between foreign direct investment and economic development in host economies. This paper examines the nonlinear relationship between economic growth, foreign direct investment, domestic investment, and financial development using annual time series data from 1970 to 2019. We used the nonlinear auto-regressive distribution lag (NARDL) co-integration technique. The results show the positive effects of FDI and DI are more significant than the negative effects and follow a nonlinear direction. As a result, policymakers should tighten their hold on FDI channelling and effectively enforce regulations in order to boost Pakistan's economic development.

Keywords: economic growth; foreign direct investment; domestic investment; nonlinear ARDL; Pakistan. (search for similar items in EconPapers)
Date: 2023
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