Impact of Political Stability on the Macroeconomic Variables and FDI of Pakistan

Abstract

In this paper we have discussed the  vital role of political stability on the link between macroeconomic variables and FDI .For this purpose we have used a data of year 1991 to 2011.In this empirical analysis we have used ADF test for the checking the stationary of the data and other software’s are SPSS and eviews.This result of this study have made sure that import ,BOP, export and GDP growth rate have significant impact on the FDI inflows in the Pakistan and inflation has a negative impact on the FDI based on this research has proved that political stability is crucial for the expansion of foreign direct investment.

Keywords: political stability, ADF, BOP, crucial etc.