The Impact of Foreign Direct Investment and Import, Export on the Economic Growth of Pakistan: An Empirical Study

Abstract

Purpose: The aim of this paper is to analyze the impact of foreign direct investment (FDI), export (EXPO) and import (IMP) in the economic growth of Pakistan from 1990 to 2015.

Design/methodology/approach: The link of foreign direct investment (FDI), export (EXPO) and import(IMP) with economic growth is measured through multiple regression model. Foreign direct investment (FDI), export (EXPO) and import (IMP) treated as regrassors and gross domestic product (GDP) treated as regressand in this model.Eviews software used to analyze the annual time series data from 1990 to 2015.

Findings: According to the findings, there is a negative and insignificant association between foreign direct investment (FDI) and GDP while there is significant and positive relationship found of export (EXPO) and import (IMP) with GDP.

Originality/value: The empirical findings of this research play a vital role for policy maker of Pakistan in formulation of FDI and trade policies.

Keywords: Foreign direct investment, export, import, GDP, economic growth.

Paper type: Research Paper.