Foreign direct investment, cost of war and trade in Pakistan

Hasanat Shah Syed, Hafsa Hasnat and Junjian Li

MPRA Paper from University Library of Munich, Germany

Abstract: This paper uses macro panel data and gravity model to examine the impact of FDI (Foreign Direct Investment) inflows from 20 trade partners and increasing war cost in Pakistan on import, export and trade deficit. The paper compares the effect and inflows of FDI in Pakistan before and after joining the war on terror in 2001. This research work confirms the complementary relationship between FDI and export and FDI and imports, however, the results of FDI impact on trade deficit is insignificant. Similarly, the impact of war cost on exports, imports and trade deficit is not significant.

Keywords: Pakistan; gravity model; uncertainty; trade partners (search for similar items in EconPapers)
JEL-codes: F21 F40 H56 (search for similar items in EconPapers)
Date: 2011-06
New Economics Papers: this item is included in nep-cwa and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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