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Impact Of Foreign Direct Investment On Economic Growth: A Case Study Of Pakistan

Author

Listed:
  • Amna Muhammad Gudaro

    (Lecturer, Economics, Civil Aviation College, Karachi)

  • Imran Umer Chhapra

    (Department of Management Sciences, KASB Institute of Technology (KASBIT) Karachi.)

  • Salman Ahmed Sheikh

    (Faculty Member, Economics Department IBA, Karachi)

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 ImplicationsOn 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.

Suggested Citation

  • Amna Muhammad Gudaro & Imran Umer Chhapra & Salman Ahmed Sheikh, 2010. "Impact Of Foreign Direct Investment On Economic Growth: A Case Study Of Pakistan," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 6(2), pages 33-41.
    • Handle: RePEc:aib:ibtjbs:v:6:y:2010:i:2:p:33-41
    DOI: https://doi.org/10.46745/ilma.ibtjbs.2010.62.4
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    References listed on IDEAS

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    1. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
    2. Adam, Anokye M. & Tweneboah, George, 2008. "Foreign Direct Investment and Stock market Development: Ghana’s Evidence," MPRA Paper 11985, University Library of Munich, Germany, revised 2008.
    3. Alfaro, Laura & Chanda, Areendam & Kalemli-Ozcan, Sebnem & Sayek, Selin, 2004. "FDI and economic growth: the role of local financial markets," Journal of International Economics, Elsevier, vol. 64(1), pages 89-112, October.
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    Cited by:

    1. Serfraz, Ayesha, 2017. "What is the effect of foreign direct investment inflows on economic growth in Pakistan? An empirical analysis in the light of religious sectarianism as catalyst for terrorism," ZÖSS-Discussion Papers 59, University of Hamburg, Centre for Economic and Sociological Studies (CESS/ZÖSS).
    2. Muddassar Sarfraz & Shuangqin Liu, 2015. "Influence of Foreign Direct Investment on Gross Domestic Product; an Empirical Study of Pakistan," American Journal of Economics and Business Administration, Science Publications, vol. 7(2), pages 94-100, July.

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    Keywords

    GDP; FDI; CPI.;
    All these keywords.

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