Economic evaluation of foreign direct investment in Pakistan
2008
Yousaf, M.M. (Sargodha Univ. (Pakistan). Dept. of Economics) | Hussain, Z. (Sargodha Univ. (Pakistan). Dept. of Economics) | Ahmad, N. (Sargodha Univ. (Pakistan). Dept. of Economics)
Foreign Direct Investment (FDI) in Pakistan is one of the major external sources of funding to meet obligations of resources gap and goal achievement. FDI has played a vital role in the economic growth of Pakistan. FDI contributed significantly in the human resources development, capital formation, and organizational and managerial skills of the people in the country. Total foreign investment was $ 6.0 billion, of which FDI amounted to $ 4.16 billion in the year 2007. The present research study empirically analyzed the impact of FDI on Pakistani imports and exports through time series data. The study applied the Unit Roots test to check the stationarity of the data series used in the analysis. Co-integration technique was used to analyze the long run relationship among the 4ariables. Error Correction Model was used for further analysis. The results of the import model showed that FDI positively impacted real demand for imports in the short run and in the long run.
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