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Capital inflows and economic growth in Pakistan

Author

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  • Raza, Syed Ali
  • Sabir, Muhammad Sarwar
  • Mehboob, Farhan

Abstract

This study intends to investigate the impact of foreign capital inflow on economic growth of Pakistan during the period of 1985-2010. The empirical analysis is based on multiple regression technique. Results show that foreign direct investment (FDI), foreign portfolio investment (FPI) and remittances are positive and significant relationship with economic growth. While foreign aid shown significant but negative relationship with economic growth. Finding further suggests that foreign direct investment, foreign portfolio investment and remittances enhance the economic growth. And it is recommended that country like Pakistan should enhance the domestic resources to break the vicious circle of foreign aid.

Suggested Citation

  • Raza, Syed Ali & Sabir, Muhammad Sarwar & Mehboob, Farhan, 2011. "Capital inflows and economic growth in Pakistan," MPRA Paper 36790, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:36790
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    References listed on IDEAS

    as
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    Cited by:

    1. Florent DEISTING & Farid MAKHLOUF & Groupe ESC Pau & Adil NAAMANE, 2011. "Développement financier, flux financiers et croissance économique," Working Papers 1504, Groupe ESC Pau, Research Department, revised Dec 2011.
    2. Frank Adusah-Poku, 2016. "Which Form of Foreign Capital Inflows Enhance Economic Growth? Empirical Evidence in Sub-Saharan Africa," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 6(10), pages 557-570, October.
    3. Mahmoud Khalid Almsafir & Zurina Mohammad Morzuki, 2015. "The Relationship between Investment and Economic Growth in Malaysia," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 4(2), pages 116-126.
    4. Henry Waleru Akani & Lucky Anyike Lucky & Kingsley Cheta Uzah, 2016. "Financial Sector Development and Macro-Economic Stability in Nigeria: A Long- Run Analysis," International Journal of Empirical Finance, Research Academy of Social Sciences, vol. 5(2), pages 112-128.
    5. Mowlaei , Mohammad, 2017. "Foreign Capital Inflows and Economic Growth of Iran," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 12(1), pages 37-54, January.
    6. Moutie Giscard & Ngouhouo Ibrahim & Kamajou François, 2015. "Effect of Financial Intermediation on Economic Growth in Cameroon," International Journal of Management Sciences, Research Academy of Social Sciences, vol. 5(9), pages 639-649.
    7. Baghebo Michael & Eniekezimene A. Francis, 2015. "Macroeconomic Policy Dynamics and Private Investment Behaviour in Nigeria," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 4(3), pages 183-192.
    8. Ahmad Mashal & Emad Ahmad & Lama Nasrawi & Anas Ghazalat, 2021. "The impact of external funding flow on Jordan’s GDP (1997-2017)," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(3), pages 328-337, April.
    9. Emerah Ajevata Apollos & Adeleke Emmanuel & David Joseph Olusegun, 2015. "Exchange Rate Volatility and Economic Growth in Nigeria (1986-2013)," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 4(2), pages 109-115.
    10. Bodo Herzog & Larissa Dausch, 2015. "Public Debt Sustainability in Europe and Leading Countries," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 4(4), pages 207-215.
    11. Anochie Uzoma C. & Ude Damian Kalu & Opara Godstime I., 2015. "Managing Inflation in Nigeria: Challenges and Prospects," International Journal of Empirical Finance, Research Academy of Social Sciences, vol. 4(6), pages 372-386.
    12. Francis A. Eniekezimene & ThankGod O. Apere, 2016. "External Reserve Management and Economic Growth in Nigeria," International Journal of Empirical Finance, Research Academy of Social Sciences, vol. 5(2), pages 101-111.

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    More about this item

    Keywords

    Foreign direct investment; foreign portfolio investment; remittances; foreign aid; economic growth; capital inflow;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists

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