Impact of Foreign Direct Investment (FDI) on Economic Growth of Pakistan

Abstract

In this study, by using time series analysis we investigated the impact of foreign direct investment on economic growth of Pakistan. We collected the data from IMF and World Bank official websites from 1967 to 2012. We used five variables for this purpose likeFDI,it is dependent variable and Inflation (independent variable),GDP (independent variable),Exports (independent variable) and Imports (independent variable).GDP and Export have the positive relationship with FDI and  inflation and import are negatively related with FDI.We used the OLS technique  for this purpose. Result suggests that the Pakistan economy isremarkable. If we control the inflation and imports that is increasing day by day, and if we concentrate for increasing the exports then our GDP will increase and we can make the Pakistan economy very well.

Key words:FDI, GDP, Inflation, Import,Export, OLS.IFM and World Bank