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Long run relationship among Gross Domestic Product (GDP), Foreign Direct Investment (FDI) and exchange rate of Pakistan: a case of Pakistan 1981-2016

Author Affiliations

  • 1Dept. of Business Administration, Sindh University Campus Larkana, Sindh, Pakistan
  • 2Dept. of Business Administration, Sukkur IBA University, Sukkur, Sindh, Pakistan
  • 3Sukkur IBA University, Sukkur, Sindh, Pakistan

Int. Res. J. Social Sci., Volume 7, Issue (1), Pages 24-31, January,14 (2018)

Abstract

Pakistan. The annual time series data of variables; gross domestic product, exchange rate and foreign direct investment has been taken for the period of 1981-2016. The Augment Dicky fuller test, co-integration method and vector error correction model were applied. The existence of long-term casual links among studied variables have been confirmed in the result. Moreover, It has been also confirmed a positive association between foreign direct investment with gross domestic product and negative association of exchange rate with gross domestic product. We infer that foreign direct investment is an optimistic force towards economic growth Pakistan.

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