The Impact of Foreign Capital Inflow on Economic Growth: Empirical Evidence from Selected Asian Countries

This study is an attempt to analyze the impact of foreign capital inflows on economic growth in selected Asian countries. In this association, we test the hypothesis “foreign capital inflows affect positively economic growth in selected Asian countries.” The Empirical analysis is made through Pooled Ordinary Least Square (OLS) estimation approach using data set of six selected Asian countries from 1990-2013. The findings of the study reveal that long run economic growth in selected Asian countries is largely explained by foreign capital inflows. In addition the findings of the study indicate that physical capital and trade openness also explain the pace of economic growth positively. The study concludes that in selected Asian countries foreign capital, physical capital, and trade openness are the key determinants of economic growth.