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Impact of Foreign Direct Investment, Rising Oil Prices, and Industry Value Added on Economic Growth of Pakistan

Author

Listed:
  • Khawaja Asif Mehmood

    (Assistant Professor, School of Economics, Bahauddin Zakariya University, Multan, Pakistan)

  • Ahsan Iqbal

    (M.Phil Scholar, School of Economics, Bahauddin Zakariya University, Multan, Pakistan)

  • Furrukh Bashir

    (Assistant Professor, School of Economics, Bahauddin Zakariya University, Multan, Pakistan)

  • Rashid Ahmad

    (Assistant Professor, School of Economics, Bahauddin Zakariya University, Multan, Pakistan)

Abstract

Rising oil prices, foreign direct investment, and industrial value-added are the key component that affects the economic stature of a country. This study locates the relationship between FDI, rising oil prices, and industry value added on the economic growth of Pakistan. To do the analyses, data length ranging from 1980 to 2020 was used. For the regression results, the analytical technique of Autoregressive Distributed Lag (ARDL) is incorporated. The empirical results show that FDI encourages economic growth. Nevertheless, industry value added is also located for positive affectation on economic growth. However, rising oil prices are found to have negative effects on economic growth. Similarly, the combined effect of oil prices and FDI are found discouraging for economic growth. As a policy option, the government of Pakistan must need to encourage FDI inflows and should step up toward industrialization. On the other side, rising oil prices be controlled at the maximum extent as it is damaging to economic prosperity.

Suggested Citation

  • Khawaja Asif Mehmood & Ahsan Iqbal & Furrukh Bashir & Rashid Ahmad, 2022. "Impact of Foreign Direct Investment, Rising Oil Prices, and Industry Value Added on Economic Growth of Pakistan," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 4(2), pages 204-214, June.
    • Handle: RePEc:ani:irdjoe:v:4:y:2022:i:2:p:204-214
    DOI: 10.52131/joe.2022.0402.0073
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    References listed on IDEAS

    as
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