The Relationship between Financial Development and Foreign Direct Investment and its Impact on Economic Growth of Pakistan
Journal: IRASD Journal of Economics (Vol.3, No. 1)Publication Date: 2021-06-30
Authors : Muhammad Sibt e Ali; Usman Ullah Khan; Dil Jan; Sabiha Parveen;
Page : 27-37
Keywords : ;
Abstract
This research investigates the interaction between foreign direct investment (FDI) and financial development (FD) to promote economic growth in Pakistan for the period 1980 - 2017. Using Autoregressive distributed lag (ARDL) bound estimation techniques, the study showed that FDI, trade openness and government expenditures has a significant impact on economic development in Pakistan. More interestingly, it is evident that the interaction effect of FDI and FD has a significant positive impact on economic growth of Pakistan. This research can play an important role in policymaking to boost FDI and FD for the economic prosperity of Pakistan.
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