Impact of Foreign Direct Investment on Employment Level In Pakistan: A Time Series Analysis

Abstract

The early 19^th century and 20th century is marked by a salient feature of close association between the economic progress and political freedom. This close association led to the phenomenon of globalization. Poor countries seek help from the rich countries and they too help them because, they also get benefit. Foreign direct investment play a key role in economic progress and this has a direct impact on employment level in any economy. This study focuses the impact of foreign direct investment on employment level in Pakistan. Data time span is 1970-2011. The variables in the study are employment level, foreign direct investment, exchange rate and GDP per capita. The study uses Johanson Co-integration approach to analyze the long run relationship between the dependent and independent variables. The result shows the existence of long run relationship.

Keywords: Employment, Investment, Multinational firms, Time Series