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Inward foreign direct investment and aggregate imports: time series evidence from Pakistan

Author

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  • Abdul, waheed
  • Syed tehseen, jawaid

Abstract

This study investigates the impact of inward foreign direct investment (FDI) on aggregate imports in Pakistan using the annual time series data for the period 1981 to 2007. The cointegration results suggest that there exists a unique significant positive long-run equilibrium relationship between inward FDI and aggregate imports in Pakistan. The respective parsimonious short-term dynamic error-correction model also confirms a significant positive short run relationship with high speed of adjustment. The causality result shows unidirectional causality running from inward FDI to aggregate imports in the country. The sensitivity analysis confirms that the results are robust.

Suggested Citation

  • Abdul, waheed & Syed tehseen, jawaid, 2010. "Inward foreign direct investment and aggregate imports: time series evidence from Pakistan," MPRA Paper 31270, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:31270
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    File URL: https://mpra.ub.uni-muenchen.de/32749/1/MPRA_paper_32749.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Saleem, 2016. "Impact of Monetary Policy on Private Investment: Evidence from Pakistan," Journal of Finance and Economics Research, Geist Science, Iqra University, Faculty of Business Administration, vol. 1(2), pages 134-146, October.
    2. My Duong & Mark J. Holmes & Anna Strutt & Steven Lim, 2019. "Effects of Trade Agreements and Foreign Direct Investment on Trade: Evidence from Vietnam," International Journal of Economics and Financial Issues, Econjournals, vol. 9(3), pages 116-126.
    3. Mushtaq AHMAD & Ferhan K. AHMAD & Muhammad Ali NASIR & Gulzar KHAN, 2015. "Internal Absorption and Foreign Direct Investment Inflows: A new approach towards Market Size," Journal of Economics and Political Economy, KSP Journals, vol. 2(3), pages 400-410, September.

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    More about this item

    Keywords

    Inward FDI; Imports; Cointegration; Causality;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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