Role of Foreign Direct Investment and Direct Investment in Economic Growth: A Case Study of Pakistan

Authors

  • Muhammad Shoaib Rashid
  • Sidra Bahauddin Zakariya University, Multan
  • Muhammad Kamran Bhatti PhD Applied Economics (Scholar), School of Economics and Trade, Hunan University, China
  • Ayesha PhD Applied Economics (Scholar), School of Economics and Trade, Hunan University, China

Keywords:

FDI, DI, Annual Data, OLS, ADF, Stability, CUSUM, CUSUM of Square

Abstract

By analyzing annual time series data from 1980 to 2020, the major purpose of this study is to examine the influence of Foreign Direct Investment (FDI) and Domestic Investment (DI) in Pakistan's economic growth.The study applied ADF Test for stationary purpose and Ordinary Least Square (OLS) method to estimate the association between dependent and independent variables. CUSUM and CUSUM of Square also applied for Stability purpose. The results of OLS method show positiveimpactofForeign Direct Investment (FDI) and Domestic Investment (DI) on economic growth. While, Inflation and Rate of Exchange has negative and significant impact on economic growth. The study suggests that thegovernment should provide safe atmosphere for foreign investors to invest in Pakistan.

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Published

2021-10-20

How to Cite

Rashid, M. S., Sidra, Muhammad Kamran Bhatti, & Ayesha. (2021). Role of Foreign Direct Investment and Direct Investment in Economic Growth: A Case Study of Pakistan. Meritorious Journal of Social Sciences and Management (E-ISSN# 2788-4589 | P-ISSN#2788-4570), 4(1), 10-20. Retrieved from http://journal.mgp.org.pk/index.php/mjssm/article/view/137

Issue

Vol. 4 No. 1 (2021): Meritorious Journal of Social Sciences and Management

Section

Articles