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Effects Of Foreign Direct Investment On Economic Growth: Empirical Evidence From Pakista

Author

Listed:
  • Akhtiar Ali

    (Wuhan University of Technology, China)

  • Abdur Rahman Aleemi

    (Institute of Business & Technology, Karachi)

  • Muhammad Tariq

    (Institute of Business & Technology, Karachi)

  • Kanwal H.Lakhani

    (Institute of Business & Technology, Karachi)

Abstract

Purpose FDI is one of the very eminent factors of world economy.It especially plays an effective role in developing countries’ economic growth, for that reasons developing economies struggle a lot to invite FDI.The previous researches provide support that FDI has a positive impact on growth of an economy.In this study the role of FDI along with other explanatory variables like gross capital formation, labor force participation and public spending against the economic growth.Methodology/Sampling The variables supplemented into the model are based on wellestablished and long standing economic theory, tested under the standard OLS regression.The data were referred from United Nation Conference for Trade and Development UNCTAD and State Bank of Pakistan FDI database.Time period for this is from 1980 to 2012.All in all32years samples were taken for study in this research.Findings The main conclusions drawn are that in the case of Pakistan, FDI and Labor force participation is found to be positively associated with economic growth.Practical Implications This study is going to help policy makers to take active measures and formulate strategies that will enhance economic growth in the country.

Suggested Citation

  • Akhtiar Ali & Abdur Rahman Aleemi & Muhammad Tariq & Kanwal H.Lakhani, 2014. "Effects Of Foreign Direct Investment On Economic Growth: Empirical Evidence From Pakista," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 10(2), pages 149-159.
    • Handle: RePEc:aib:ibtjbs:v:10:y:2014:i:2:p:149-159
    DOI: https://doi.org/10.46745/ilma.ibtjbs.2014.102.11
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    References listed on IDEAS

    as
    1. Zeshan Atique & Mohsin Hasnain Ahmad & Usman Azhar, 2004. "The Impact of FDI on Economic Growth under Foreign Trade Regimes: A Case Study of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 43(4), pages 707-718.
    2. Balasubramanyam, V N & Salisu, M & Sapsford, David, 1996. "Foreign Direct Investment and Growth in EP and IS Countries," Economic Journal, Royal Economic Society, vol. 106(434), pages 92-105, January.
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    4. Jiangyan Yu & Mr. James P Walsh, 2010. "Determinants of Foreign Direct Investment: A Sectoral and Institutional Approach," IMF Working Papers 2010/187, International Monetary Fund.
    5. World Bank, 2014. "World Development Indicators 2014," World Bank Publications - Books, The World Bank Group, number 18237.
    6. V N Balasubramanyam & M Salisu & David Sapsford, "undated". "Foreign Direct Investment and Growth: New Hypotheses and Evidence," Working Papers ec7/96, Department of Economics, University of Lancaster.
    7. World Bank, 2014. "The World Bank Annual Report 2014 [Informe anual 2014 del Banco Mundial]," World Bank Publications - Books, The World Bank Group, number 20093.
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    Cited by:

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