Article | Open Access | Published: 3 December 2012
Impact of Foreign Direct Investment on Economic Growth: A Case Study of Pakistan
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Abstract:
This research paper aims to analyze the impact of foreign direct investment (FDI) in Pakistan for the period 1981 to 2010. It evaluated the GDP growth performance and assessed the historical trends of the FDI and CPI in Pakistan. The link between gross domestic product (GDP,) foreign direct investment, and Inflation is measured with the help of multiple regression models. GDP in this model is used as a dependent variable whereas FDI and inflation (CPI) are measured as independent variables. According to the results, the model is overall significant with the positive and significant association of GDP and FDI while a negative and the significant relationship found between GDP and inflation. Practical Implications based on the empirical results acquired, Policy proposals are advised to attract FDI in Pakistan. Foreign direct investment (FDI) is an essential factor for economic growth in developing countries. FDI allows the transfer of technology, uplift competition in the domestic input market, contributes to human capital development and Profits.
Keywords:
Foreign direct investment, gross domestic product, inflation
Publisher:
ILMA UNIVERSITY
Published:
3 December 2012
Issue:
Issue 2 : Volume 8
E-ISSN:
2409-6520
P-ISSN:
2414-8393
This is an open access article distributed under the terms of the Creative Commons Attribution CC BY 4.0 license, which permits any use, distribution, and reproduction of the work without further permission provided the original author(s) and source are credited.