Impact of foreign direct investment on economic growth: A case study of Pakistan

Amna Muhammad Gudaro, Imran Chhapra and Salman Ahmed Sheikh

MPRA Paper from University Library of Munich, Germany

Abstract: Purpose- This research paper aims to analyze the impact of foreign direct investment (FDI) in Pakistan for the period 1981 to 2010. It evaluated the GDP growth performance and assessed the historical trends of the FDI and CPI in Pakistan. Methodology/Sample- The link between gross domestic product (GDP,) foreign direct investment and Inflation is measured with the help of multiple regression models. GDP in this model is used as dependent variable whereas FDI and inflation (CPI) are measured as independent variables. Findings- According to the results, the model is overall significant with the positive and significant association of GDP and FDI while a negative and significant relationship found between GDP and inflation. Practical Implications- On the basis of the empirical results acquired, Policy proposals are advised to attract FDI in Pakistan. Foreign direct investment (FDI) is an essential factor for economic growth in the developing countries. FDI allows the transfer of technology, uplift competition in the domestic input market, contributes to human capital development and Profits created by FDI contribute to corporate tax revenues in the host country.

Keywords: GDP; FDI; CPI (search for similar items in EconPapers)
JEL-codes: E2 E50 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published in Journal of Management and Social Sciences Fall 2012.8 (2)(2012): pp. 22-30

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:51069

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