Analysis of socioeconomic factors that dampen the flow of foreign direct investment

It is difficult to neglect the prominence of socio-economic factors that dampen the flow of Foreign Direct Investment (FDI) to a country, inspite of either being developed or developing. This study, however, looked into such factors that affect FDI inflows towards Pakistan.This study gains appreciable position due to an attempt of looking into the theoretical perception, some of whom are tested while others are not, that explain such determinants of FDI.Exercising Auto Regressive Distributed Lag (ARDL) technique of investigation on data ranging from 1974 to 2014 along with Error Correction Model (ECM) and bound test, some interesting facts, apart from conventional, though not in Pakistan or either quite rare, are found on the socioeconomic variables mix chosen in this research.It is suggested that the government is to look for specific policies to cater the problem of corruption that is found as a major hinge in the way of FDI inflows

Foreign capital inflows and employment : evidence from South Asian countries

This study is conducted to enlighten the first-line issue of Foreign Capital Inflows (FCI) and employment in South Asian countries such as Bangladesh, India, Pakistan, and Sri Lanka. These countries are inclined to have heavy FCI, since realize the deficiency of capital as root cause of their macroeconomic problems. The study reveals that FCI are evident in their escalation towards South Asian countries however, are less prompt in the evacuation of depressed state of employment. The study was to analyze secondary data for two periods i.e. 1972 to 2014 and 1980 to 2014. Autoregressive distributed lag, impulse response and variance decomposition, fully modified ordinary least square, seemingly unrelated regression, and Granger causality analyses were performed to validate and measure the effects of FCI onto the level of employment. The analyses of autoregressive distributed lag reveal assorted outcomes of each category of FCI at either of the countryside whereas analytics of fully modified ordinary least square divulge worker remittances as the only form of FCI that ascertain positive relationship with employed labor force of South Asian countries. The results of impulse response and variance decomposition also illustrate different impacts of each of the component of FCI whereby Granger causality analyses confirm the causality between employed labor force and the components of FCI. At large, seemingly unrelated regression results suggest that the combined effects of FCI are significant and positive while South Asian countries are segregated. The study concludes to be as substantial for the governments and policy makers of South Asian countries to have different consideration among FCI. The implementation of pragmatic policy can lead towards much more of the progressive fallouts of such vital FCI on raising employment in such countrie

A study on mapping out alliance between economic growth and foreign direct investment in Pakistan

Sustained economic growth is a trance of all the developing and developed countries of the world. The need is not just a fetch of economic growth rather is a realization of a fact that the why some economies that receive heavy amount of foreign capital inflows in term of foreign direct investment (FDI) still find hard to capture the economic growth targets.This research captures for the state of the position of economic growth in terms of FDI and other internal factors in Pakistan. The study is based on the time series analysis covering the range of data from 1972 to 2014. Johansen Juselius technique of co-integration is employed for the precise statistical findings.Unit root test is computed in terms of Augmented Dickey Fuller Test (ADF). Granger Causality test and Error Correction Model (ECM) is employed to test for the short-run and long-run relationships and causality between the variables selected in the equation of growth. The results of the study show that FDI and GDP possess positive association in short-run as well as in long-run. Unidirectional causality is also found on account of FDIand GDP. The study suggests that the government of Pakistan is to further pave off the ways that it already practices to attract FDI that is prerequisite for sovereign upcoming scenery of the country

INTERPRETATION OF ELEMENTS UPSETTING EXPORT GROWTH IN PAKISTAN

Exports are the important instrument of economic growth.Instabilities in export earnings present uncertainties in an economy.These uncertainties bring significant impact over the economicbehavior by poorly upsetting the proficiency of investment and in turnhave an adverse effect on economic growth. The core objective of thisstudy is to find the impact of some of the key macroeconomic variablesthat affect exports growth of Pakistan. The data is from the year 1972-2012. Johansen Juselius (1990) test is implemented for getting thedesired results. The results show that all of the variables sustain apositive relation to Export. Conclusion drawn is the need of obligatorysteps required to be taken by the Government so as to build a nationon the footings of strong export receipts

Effects of Privatization on Economic Performance in Pakistan

Abstract: Privatization is an initiative that is finalized upon the selling-off of the State Owned Enterprises (SOEs). It is also felt when the Government of a certain country is to contract out the State Services. Pakistan as a developing country of the world, enjoys a pride of its geographical importance, does not stand as a nation that participates unduly in privatizing the governmentassets. Rather despite the government urge, some unforeseen incidents that happen today in Pakistan are not to attract foreign investors to have a desire of executing investment in SOEs. The aim of our study is to focus upon the effects of privatization, either acceptable or not, on an economic growth of Pakistan and on the other macroeconomic indicators

Impacts of Macroeconomic Variables on Foreign Exchange Rate of SAARC Member Countries

Exchange rate (EXR) stability is crucial for especially the developing economies. This study examines the macroeconomic variables which affect EXR in member countries of South Asian Association for Regional Cooperation (SAARC). To do the analyses, data from 1981 to 2019 was relied upon. To estimate the long-run coefficients, Fully Modified Ordinary Least Square (FMOLS) is incorporated. The outcomes of FMOLS exhibit that the variables such as trade, inflation, GDP, total debt services, trade openness, and tariff rate are inversely related to EXR while broad money is found to affect the EXR in positive. As a policy prospect, The Central Bank (CB) is needed to follow tight monetary policy to curtail liquidity of money in economy. It is recommended that CB to discourage government project financing that is to cause increase in money supply but to initiate trend line to facilitate GDP growth, trade, and imposition of tariff to curtail rising EXR

Foreign Inflows and Poverty in Pakistan: A Quantitative Approach

Foreign Inflows (FI) acquire immense importance for the open economy. Empirical as well as theoretical findings highlight that FI intensely affect the economic state of the host country. Important issue in this respect is to examine the impact(s) of FI on poverty. The study was based on data from 1972 to 2017. It is concluded a long term relationship between poverty and FI. At large, FI do exhibit having opposite relationship with poverty. Moreover, poverty being long run macroeconomic problem does have short run causality with some of FI. Granger causality is also confirmed on some of FI and poverty. Policy recommendation is the appropriate capital allocation for the efficient restoration of the results of FI

RAMIFICATIONS OF GOVERNANCE INFRASTRUCTURE AND FDI FLUX IN PAKISTAN: Khawaja Asif Mehmood, Syeda Azra Batool, Maria Ishtiaq

The prominence of Foreign Direct Investment (FDI) to Pakistan is due to its positive macroeconomic fallouts. The factors that maneuver as impediment towards FDI are socioeconomic in nature. To deliberate such factors, this study is distinctive in context of incorporating governance infrastructure such as; political stability, quality of governance, and control of corruption for the period of 1980-2018. Autoregressive Distributed Lag was used to estimate the coefficient in varied time horizon. Findings concluded governance infrastructure to be significantly and positively affecting the flow of FDI. Thus, better handling of the same is essential so that the macroeconomic goals that are hindered due to lack of capital be fulfilled in ready course of time