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Impact of FCI on Economic Growth in Pakistan


  • Ghulam Mohey-ud-din

    (GC University, Lahore, Pakistan)


The Two-Gap Model suggests that the Poor countries have to rely on the foreign capital inflows (FCI) to fill the two Gaps: Import-Export Gap and the Savings-Investment Gap. There are many forms of the foreign capital inflows like FDI (Foreign Direct Investment), External loans & Credit, technical assistance, Project & non-project aid etc. So, UDC (including Pakistan) have to rely on the Foreign aid, foreign Debt FDI and portfolio investments. The role of these external resources (FCI) always remains questionable. This paper analyzes the impact of the foreign capital inflow on GDP Growth in Pakistan during 1975-2004.

Suggested Citation

  • Ghulam Mohey-ud-din, 2007. "Impact of FCI on Economic Growth in Pakistan," Journal of Independent Studies and Research (JISR), Shaheed Zulfikar Ali Bhutto Institute of Science and Technology (SZABIST), vol. 5(1), pages 24-29, January.
  • Handle: RePEc:zab:ancoec:v:5:y:2007:i:1:p:24-29

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    References listed on IDEAS

    1. Leff, Nathaniel H, 1969. "Dependency Rates and Savings Rates," American Economic Review, American Economic Association, vol. 59(5), pages 886-896, December.
    2. Naheed Aslam, 1987. "The Impact of Foreign Capital Inflow on Savings and Investment: The Case of Pakmtan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 26(4), pages 787-789.
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    Cited by:

    1. Muhammad Luqman & Mirajul Haq & Karim Khan, 2015. "The Role of Political Regimes in the Macroeconomic Effectiveness of Foreign Aid in Pakistan," South Asian Journal of Macroeconomics and Public Finance, , vol. 4(1), pages 118-137, June.
    2. Sharafat, Ali & Hamid, Waqas & Muhammad, Asghar & Raheel Abbas, Kalroo & Muhammad, Ayaz & Mukhtyar, Khan, 2013. "Foreign Capital and Investment in Pakistan: A Cointegration and Causality Analysis," MPRA Paper 55640, University Library of Munich, Germany, revised 28 Apr 2013.
    3. Quynh Anh Do & Quoc Hoi Le & Thanh Duong Nguyen & Van Anh Vu & Lan Huong Tran & Cuc Thi Thu Nguyen, 2021. "Spatial Impact of Foreign Direct Investment on Poverty Reduction in Vietnam," JRFM, MDPI, vol. 14(7), pages 1-16, June.
    4. Kalpana Sahoo & Narayan Sethi, 2017. "Impact of Foreign Capital on Economic Development in India: An Econometric Investigation," Global Business Review, International Management Institute, vol. 18(3), pages 766-780, June.

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    More about this item


    Foreign capital inflows (FCI); Foreign Investment; Economic Growth; Foreign Economic Assistance; Official Development Assistance (ODA); Foreign Direct Investment (FDI). Foreign Debt Burden; Aid and Growth; FCI Effectiveness.;
    All these keywords.

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics
    • A2 - General Economics and Teaching - - Economic Education and Teaching of Economics


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