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

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  • Hafiz M. Sohail
  • Zengfu Li

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.

Suggested Citation

  • Hafiz M. Sohail & Zengfu Li, 2023. "Nexus among foreign direct investment, domestic investment, financial development and economic growth: a NARDL approach in Pakistan," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 25(2), pages 249-269.
    • Handle: RePEc:ids:ijecbr:v:25:y:2023:i:2:p:249-269
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    Cited by:

    1. ATOI, VICTOR NGOZI (PhD), 2023. "Assessing the Drivers of Steady State Economic Growth in Nigeria," MPRA Paper 119386, University Library of Munich, Germany.
    2. Bakari, Sayef, 2024. "Unlocking Prosperity: Fresh Insights into Economic Growth Through Financial Development, Domestic Investment, and Corruption Trends in LAC Countries," MPRA Paper 120411, University Library of Munich, Germany.
    3. Wu, Zihao & Gao, Jun & Xu, Hui & Shi, Guanqun & Zaidan, Amal Mousa & Ageli, Mohammed Moosa, 2023. "Visualizing symmetric and asymmetric settings in MMQR for natural resources extraction and economic performance: A COVID-19 perspective," Resources Policy, Elsevier, vol. 85(PB).

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