Natural resources, financial expansion and gross domestic savings influence to economic progress: a road to long-term sustainability

This study examined the impact of financial expansion, natural resources, gross domestic savings, and foreign direct investment on economic development in Pakistan, using annual data spanning from 1970 to 2020. We utilized the three regression techniques including Generalized Method of Moments (GMM), Cointegrating Regression analysis (FMOLS, DOLS, and CCR), and dynamic Autoregressive Distributed Lag (ARDL) to uncover the determinants influence on economic progress. The GMM technique findings reveal that natural resources and foreign direct investment have positively influenced the economic progress. Financial expansion and gross domestic savings both have a detrimental effect on Pakistan’s economic growth. Moving on to the effects of FMOLS, DOLS, and CCR, the natural resources and foreign direct investment favourably affected the Pakistan’s economic growth, whereas financial expansion and gross domestic savings adversely influenced the economic growth. Furthermore, the outcomes of dynamic symmetric (ARDL) approach in the short-run and long-run show that FDI and financial expansion have a negative impact on economic development, whereas natural resources and gross domestic savings have a favourable impact. In order to attain long-lasting and sustainable economic growth, it is crucial for the government to implement inventive policies and regulations that promote financial supply-side reform and enable various financial development initiatives.