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Investigating the asymmetrical influence of foreign direct investment, remittances, reserves, and information and communication technology on Pakistan’s economic development

Author

Listed:
  • Abdul Rehman
  • Magdalena Radulescu
  • Fayyaz Ahmad
  • Muhammad Kamran Khan
  • Silvia Elena Iacob
  • Laura Mariana Cismas

Abstract

The study used an asymmetric ARDL model to analyse the asymmetric (positive and negative shocks) impact of foreign direct investment, personal remittances, total reserves, gross savings, and information and communication technology on economic growth in Pakistan from 1976 to 2019. The short-run and long-run results of the asymmetric autoregressive distributed lag approach show that total reserves have a negative and non-significant influence on Pakistan’s economic growth. Similarly, the results of asymmetric ARDL show that positive shocks in personal remittances have a positive and significant influence on Pakistan’s economic growth, but negative shocks have a negative and non-significant impact in both the long-run and short-run. The findings of the gross savings show that a positive shock has a favourable and non-significant impact on economic growth in both the long-run and short-run. The investigated outcomes of foreign direct investment show that positive shocks have a detrimental and considerable impact on the economy of Pakistan in both the long-run and short-run. Furthermore, information and communication technology has a negative impact on economic growth in both the long-run and short-run. The government of Pakistan may adopt better policies to build the country’s infrastructure by employing foreign investment more effectively.

Suggested Citation

  • Abdul Rehman & Magdalena Radulescu & Fayyaz Ahmad & Muhammad Kamran Khan & Silvia Elena Iacob & Laura Mariana Cismas, 2023. "Investigating the asymmetrical influence of foreign direct investment, remittances, reserves, and information and communication technology on Pakistan’s economic development," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 36(2), pages 2131591-213, July.
    • Handle: RePEc:taf:reroxx:v:36:y:2023:i:2:p:2131591
    DOI: 10.1080/1331677X.2022.2131591
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