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The study utilized correlation and multiple regression analysis to determine the impact of FDI on the
economic growth of Pakistan. In July 2020, Foreign Direct Investment in India increased by 3269
USD Million. FDI inflows of Pakistan started fluctuating from 1990s to 2015, there the purpose of
this study is to evaluate the factors affecting Foreign Direct Investment in Pakistan from 2005 to
2015. So finally, the findings of the study reveal that FDI positively affects the economic growth in
Pakistan. Additionally, it promotes enhanced productivity in host nations. Khan (2007) examined the
link between foreign direct investment, domestic financial sector and economic growth for Pakistan
over the period 1972 to 2005. Therefore, FDI can have a positive impact on income. 5 Despite the
fact that many studies established the idea that FDI has a positive impact on the economic growth of
a host country, there are some studies that argue that the relationship between FDI and economic
growth is ambiguous. FDI data maybe collected from World Bank and IMF database of statistics.
Ownership, Locational Advantages and Internalisation form the crux of fdi. Haruna (2012) supports
the argument that FDI does not much contribute to economic growth due to profit repatriations,
interest payment on foreign loans and contract fees. The automatic route permits foreign and non-
resident Indian (NRI) investors to invest up to 100% in most sectors, including the services sector,
without prior approval. CUSUM and CUSUMSQ tests generate figure plots using the sum of
recursive residuals and sum of squared recursive residuals respectively. The basic idea is to find out
how the incorporation of FDI into the economy of these developing nations have changed their
mode of living and these have either helped or hindered their business in particular and economic
growth as a whole. The minimum value of inflation is recorded as 2.53 in the year 2015 while the
maximum value of inflation is 20.28 in 2008. The findings show that there is a rising and falling
trend of the values of inflation rate with significant annual variations over the last 25 years. 4.1.4.
Exchange Rate The findings on the exchange rate nominal values are shown in Table 1 above and
Figure 4 below: Figure 4. The probability of F-statistics is less than 0.05 for the short-run model
indicating its significance. Intrusion Detection and Forensics based on decision tree and Association
rule. This effect was characterized by falling exports demand, foreign capital inflows in terms of
foreign direct investment (FDI), foreign aid inflows and remittances from African immigrants
working in the ICs. It affects the economic growth by stimulating domestic investment, increasing
human capital formation and by facilitating the technology transfer in the host countries. The extent
of increase in FDI might be placed in proper perspective when one understands that between the
years 1980 and 1995 there was a four-fold increase in the total amount of fdi worldwide. IJMER
Application of Weighted Centroid Approach in Base Station Localization for Mi. Therefore FDI has
become a battle ground of emerging markets, behind allowing FDI is to complement and supplement
domestic investment, for achieving a higher level of economic development and providing
opportunities to technological up gradation, plus access to global managerial skills and
practices(ICA). Comprehensive studies related to the impact of FDI on economic growth of Sri
Lanka are limited. The study seeks to analyze whether the inflow of foreign direct investment is
really leading to economic growth and capital formation within the less developed countries. This
thesis examines the impact of fiscal policy on economic growth in four countries of South Asia.
Firms which feel that the goods produced in India will have a low cost, will produce the goods and
export the same to other country. FDI and inflation (CPI) are independent variables and GDP is
dependent variable. The selected econometric model gets through all the diagnostic tests and
confirms the absence of serial correlation, heteroscedasticity, and non-normality. This benefits small
and medium-sized business enterprises as it becomes easier for them to borrow finances at lower
interest rates. Investment in foreign enterprises without long-term financial relationship plans is made
through stocks and bonds in FPI. The study finds a positive effect of FDI on growth.
The list of investing countries to India reached to 150 in 2010 as compared to 29 countries in 1991.
Additionally, there is a risk of losing ownership to a foreign company, which has made many
companies approach foreign direct investment cautiously. IJMER Geochemistry and Genesis of
Kammatturu Iron Ores of Devagiri Formation, Sandu. The topic “The impact of foreign direct
investment on economic growth of less developed countries” seems to be interesting and relevant.
The effect of FDI on economic growth differ between countries, type, and sector of destination. By
utilizing time series data from 2008-2013, the study concluded that FDI, trade openness and
domestic capital positively affect the economic growth. FDI has become an essential component of
national development strategies for countries worldwide. Moreover, the study also shows that
business freedom index and investment freedom index has a positive effect on foreign direct
investment at 5% significant level. It helps in generation of employment and also helps poverty
eradication. However, FDI through acquisitions does not provide long-term benefits compared to
Greenfield investments. Given the global economic environment, and the smallness of the Gambia's
economy relative to its trading partners, we put forward that the implementation of these strategies is
in a framework of engaging the public, private and foreign sectors. FDI-growth relationship is
stronger in regional unite variation than in country variation because of a region is a larger unite
hosting sufficiently different type of FDI. The study uses correlation and multiple regression analysis
techniques for analysis of data. These findings would be an example for other small open economies
with similar economic characteristics. After analyzing the calculations we came to know that foreign
direct investment is a significant element for the economic development because it has positive
impact and have significant rel. According to the table 1, only the variable log FDI is stationary on a
level I(0) both for intercept and trend with intercept. The drawbacks of foreign direct investment
mainly involve operations, distribution of profits, and personnel. Our main results are the following:
(i) As generally found in the literature, Human capital, Labor Market conditions, Real Effective
Exchange Rate and GDP per capita are clear determinants of industrialization in Africa; (ii) The
determinants of industrialization vary between regions in the continent and evolve over time; (iii)
policy interdependencies are significant and positive for industrialization in Africa. ARDL approach
is applied to examine the long-run relationships and the short run dynamics between the variables
under consideration. It implies that by means of controlling parameters (for example, savings rates
and population growth rates), poorer nations will tend to develop faster and hence will come up to
reach the levels of comfort enjoyed by their affluent counterparts (Ray, 2007, pp. 1-2). Hence, FDI
promotes export-oriented activities that enhance the export performance of the country. Analysis of
Temperature loss of Hot Metal during Hot Rolling Process at Steel. Foreign Direct investment plays
a major role in the economic expansion when there is a shortage of domestic savings. 3 Foreign
Direct Investment (FDI) has been emerged as a catalyst for accelerating the economic growth of
developing countries. Download Free PDF View PDF Accelerating Economic Development and
Improving the Current Account Balance: What Roles can Industrial Policy Play in The Gambia
European Scientific Journal ESJ The Gambia has been running continuous current account deficits
since the 1970s owing to large merchandise importation. The paper aims to clarify the main causes of
failure of foreign direct investments in Kosovo and reviles the importance of indicators that majorly
has an institutional nature. Secondly, it is relatively more efficient with small and finite sample size.
The ARDL approach to cointegration is applied to identify long-run relationship and short-run
dynamics between selected variables for the period of 1978 to 2015 for Sri Lanka. Present study
checked how fiscal deficit affects the GDP growth rate in short run and long run. The qualitative
research paper analyzed in this paper is “Risk, FDI and Economic Growth: A Dynamic Panel
Analysis of the Determinants and Growth impact of fdi in Africa” by Kevin N. The findings of the
study show insignificant causality between FDI and economic growth.
Experimental Investigation on Characteristic Study of the Carbon Steel C45 in. SPSS statistical
package will be used to run the regressions. Hence, FDI promotes export-oriented activities that
enhance the export performance of the country. Analytical techniques such as Autoregressive
Distributed lag (ARDL) Model, Error Correction Model (ECM) and ADF test were used to draw the
results. Based on annual FDI inflow data extracted from UNCTAD database, FDI inflows to the
country has been declining since 2010. The minimum value is calculated as USD 258.41 million in
1991 while the maximum value is calculated as USD 5590 million in 2007. The F-statistics which is
generated by Wald test has to be compared with critical values of Pesaran, et al.(2001) table.
Pesaran table provides lower I (0) and upper I (1) critical bounds. Additionally, in today's age of
information sharing and technology markets, technology transfer is readily achievable, enabling
entrepreneurs to acquire the necessary technology. Human capital proxied by secondary school
enrollment enhances per capita GDP. For this we incorporate the production function in regression
model. Therefore for further opening up of the Indian economy, it is advisable to open up the export
oriented sectors and higher growth of the economy could be achieved through the growth of these
sectors. Further it focusing on new markets where there is availability for abundant labours, product
scope, high profits etc. Considering User Participation in Light Of level and Stages of Self-Selectio.
Accessibility, User Agreement, Privacy, Payments Terms of Use, Cookies, CA Privacy Notice, Your
Privacy Choices and AdChoice. The ARDL approach to cointegration is applied to identify long-run
relationship and short-run dynamics between selected variables for the period of 1978 to 2015 for Sri
Lanka. Market size, easy accessibility to export market, government incentives, developed
infrastructure, cost-effectiveness, and macroeconomic climate of China are more constructive to
India attracting foreign investors. Experimental Investigation on Characteristic Study of the Carbon
Steel C45 in. After the 1991 economic liberalization, the Indian government's favourable policy
regime and robust business environment ensured that foreign capital keeps flowing into the country.
In case of qualitative study, types of data which will be collected generally involve the opinions and
beliefs of the researcher and the subjects who will be studied, through the application of various
instruments. The F calculated value is greater than the F critical value which shows that the overall
model was significant. Table 5. Regression Analysis From the regression findings in table 5 above,
we substitute the values in the regression equation; Where Y represents GDP, which is dependent
variable, X 1 is FDI, X 2 is inflation rate, X 3 is exchange rate and X 4 is interest rate. Therefore FDI
has become a battle ground of emerging markets, behind allowing FDI is to complement and
supplement domestic investment, for achieving a higher level of economic development and
providing opportunities to technological up gradation, plus access to global managerial skills and
practices(ICA). According to the table 1, only the variable log FDI is stationary on a level I(0) both
for intercept and trend with intercept. This is because these countries have altered their economic
strategies and permitted foreign direct investors to enter and enhance their economies. The aim is to
emphasize the significance of enabling policy structure to help make the most of the opportunities
that the innovative drifts contain. Non linear analysis of Robot Gun Support Structure using
Equivalent Dynamic A. During a research, interviews of some selected people are conducted to find
out what an individual actually thinks regarding a particular issue. Based on the findings, the article
recommends that Vietnam continues to seek positive solutions to enhance the economic growth rate,
continuation in investment and business liberalization. Keeping this in mind, the objective of this
study is to determine the effect of macroeconomic variables such as interest rate, real exchange
rate,inflation rate and stock market on foreign direct investment in Pakistan. You can download the
paper by clicking the button above. A Proposal for the case of the Indians against FDI in Retail Trade
To From A Proposal for the case of the Indians against FDI in Retail Trade I write this letter to
provide a solution to the recurring problem faced between the indian government and U.
Complementarity relationship is found between foreign and domestic capital in long run implying a
positive spillover from foreign to domestic capital. For example, the recent boom in Artificial
Intelligence, Blockchain Technology which helps other countries to uplift their technology. Sri Lanka
promoted to the middle-income category in 2010 and the geographic location is comparatively more
attracted in inward FDI. Just like with FII inflows, in this scenario as well, the foreign investor does
not directly contribute to the expansion of production capacity. Comparison with the other
developing countries especially East and South-east Asian countries, it is questionable whether Sri
Lanka could achieve the development goals as expected in policy reforms. Nevertless, still a lion’s
share of FDI comes from only a few countries. Fig. 1: FDI Inflows in India (1948-2010). The study
came up with the recommendations that government should ensure political stability and enhanced
domestic investment in order to attract more FDI in Pakistan. Many nations opening up their doors
have forced them to adopt reforms. It affects the economic growth by stimulating domestic
investment, increasing human capital formation and by facilitating the technology transfer in the host
countries. Although, foreign direct investment is considered as the vehicle of the economic growth
of the host country but some estimated benefits may prove vague if the host economy is not able to
take advantage of the new technologies or know-how transferred from FDI. The purpose of this
study is to examine this issue for a country which practiced comparatively more liberal economic
policies within the South Asian region over four decades. He emphasizes the need for more
greenfield investment expanding manufacturing sector to increase export and economic growth. It is
recommended that the government should focus more on non-tax sources and should increase the
percentage of non-tax revenue in total revenue. The estimation results show that the government
expenditure has a positive and significant effect on economic growth of Afghanistan and its
coefficient is almost 5 percent. Hence, this study aims to investigate this inconclusiveness by
illustrating depictions by two major schools of thought in economics that is classical and Keynesian.
According to AT Kearney's FDI Confidence Index, India has surpassed the US as the second-most
favored destination for foreign direct investment (FDI) worldwide, after China. Additionally, the
FDI policy oversees FDI stocks, which could potentially decrease confidence among global
investors and impede both FDI and economic growth in India. Based on the findings, the article
recommends that Vietnam continues to seek positive solutions to enhance the economic growth rate,
continuation in investment and business liberalization. An indirect disadvantage is that the
economically disadvantaged section of the host country is inconvenienced when foreign direct
investment is negatively affected. However, gambling and lottery activities do not allow foreign
investment. For example, the research will use ratio measurement to compare fdi inflow to
developing countries in the years 2005, 2006 and 2007. While it is evident that inward FDI carries
similar advantages, external FDI driven by the privileges of the domestic firm, is incorporated into
existing business plans and polices. Foreign direct investment and growth of economy have strong
positive association, which is the most important finding of the study. Some empirical studies end
with positive relationships between these two variables while others conclude with negative, weak or
no relationships. Using Augmented Dicky-Fuller (ADF) unit root test, we checked the order of
integration of selected variables. We are eager to understand the extensive impact of FDI on our.
They extend the argument that developing countries are beneficial of FDI with transferring advanced
technology. However, it can observed the result of sectoral level output, productivity and export is
minimal due to the low flow of FDI into India both at the macro level as well as at the sectoral level.
The qualitative research paper analyzed in this paper is “Risk, FDI and Economic Growth: A
Dynamic Panel Analysis of the Determinants and Growth impact of fdi in Africa” by Kevin N.
Below mentioned points explain how FDI helps in the development of the developing country.
The reason behind this is that FDI assists in transferring advanced technologies knowledge and
enhance levels of output to the host states. FDI specifically targets a particular enterprise, with the
goal of boosting its capacity or altering its management control. Many international institutions,
politicians and economists consider Foreign Direct Investment as a major tool of the economic
growth of a country as well as the solution of economic issues. Despite the drawbacks, foreign direct
investment has played a pivotal role in shaping the economic fortunes of many countries worldwide.
Most of all, I want to thank my parents for their endless love and trust in me which keeps me going
forward at every stage of my life. Foreign Direct investment plays a major role in the economic
expansion when there is a shortage of domestic savings. 3 Foreign Direct Investment (FDI) has been
emerged as a catalyst for accelerating the economic growth of developing countries. These
regulations are imposed by the government as part of its theory. The study finds no effect of FDI on
economic growth neither a long run nor short run for the majority of countries. But measures
introduced by the government to liberalize provisions relating to FDI in 1991 increased FDI Rs.2705
crores in 1990 to Rs.123378 crores in 2010. Moreover, the study also shows that business freedom
index and investment freedom index has a positive effect on foreign direct investment at 5%
significant level. For further details the Johansen co-integration tests along with Granger Causality
tests will be performed to check the causality between stock price indices and FDI. If you provide
content to customers through CloudFront, you can find steps to troubleshoot and help prevent this
error by reviewing the CloudFront documentation. Zilinske (2010) states that the effects of foreign
direct investment can be positive as well as negative. Malik and Khola (2015) analysed the impact of
FDI and trade openness on economic growth of Pakistan. It is mentionable that, to identify the
qualifications of time series data and to choose appropriate model for our empirical study, we have
used from Augmented-Dicky Fuller test to evaluate the stationarity of the variables. However,
gambling and lottery activities do not allow foreign investment. Jawaid (2016) and Khan 2017 found
in their studies that FDI has positive impact on the economic growth both in the short run and long
run. 5. Conclusions and Recommendations The study aims to analyse the impact of foreign direct
investment (FDI) on the economic growth of Pakistan over the period 1991-2015. With the potential
of the market and increasing demand of the handbags (Venugopal, 2010), this report analyses the
possibility of introducing one of the designer handbags offered by Luxurious in indian Market. Falki
(2009) investigated the impact of foreign direct investment on the economic growth of Pakistan by
using production function based on the endogenous growth theory covering the period 1980-2006.
Co-integration of variables is checked using pair-wise Granger causality analysis and VEC Granger
causality Wald test. FDI data maybe collected from World Bank and IMF database of statistics.
These findings hold true regardless of different metrics used to gauge financial market development,
the incorporation of othe. As a result, research and development in the innovating country expand
the lowering cost of innovation, ultimately causing world growth rate rises. F-statistics Wald
coefficient restriction test confirmed the long-run relationship between the variables. Hence, this
model can be applied to explain FDI-economic growth relationship in Sri Lanka. Countries like
Saudi Arabia, with ample natural resources, attract foreign investment from companies seeking to
exploit these resources. Accelerating Real Time Applications on Heterogeneous Platforms
Accelerating Real Time Applications on Heterogeneous Platforms Analysis of Temperature loss of
Hot Metal during Hot Rolling Process at Steel. Further it is argued that high-tech knowledge,
technology, and managerial skills can be spill-over from foreign firms to domestic firms improving
the productivity of local firms (Athukorala, 2003; Balasubramanyam et al.,1996; Hakimi and Hamdi,
2016; Haruna, 2012; Iamsiraroj and Ulubasoglu, 2015; Mahmood, 2013; Makki and Somwaru, 2004;
Tsai, 1995; Zilinske, 2010). It is argued that the long-lasting internal conflict which was ended in
2009, was one of the main reasons for weak performance on FDI recipients. The selected
econometric model gets through all the diagnostic tests and confirms the absence of serial correlation,
heteroscedasticity, and non-normality.
Due to time constraint, the other determinants such as, Gross Domestic Product (GDP), Personal
Savings, etc. Impact of labor force on GDP per capita is negative and insignificant. The study seeks
to analyze whether the inflow of foreign direct investment is really leading to economic growth and
capital formation within the less developed countries. The appropriate lag is selected automatically
based on Schwarz Criterion and the selected ARDL model is (1,0,1,0,0). A descriptive survey
research design is adopted in the research study. Even in the rural areas of Punjab, one can witness
the unexpected use of washing machines. FDI have helped India to attain a financial stability and
economic growth with the help of investments in different sectors. Financial development and trade
openness are found to be the most important absorption factors in FDI to economic growth. As a
result, research and development in the innovating country expand the lowering cost of innovation,
ultimately causing world growth rate rises. It implies that by means of controlling parameters (for
example, savings rates and population growth rates), poorer nations will tend to develop faster and
hence will come up to reach the levels of comfort enjoyed by their affluent counterparts (Ray, 2007,
pp. 1-2). The FDI news in India covers notations, strategies, and guidelines for foreign funds
entering the country. In attaining the aim of the research, the objectives were examined, such as
review of the vital factors in the movement of fdi in the global context, analysis of the trends in FDI
in China, analysis of fdi trends in India and a comparison with China, observation of the differences
between the Chinese and Indian situation in that field. The study examines the impact of FDI on the
factors of economic growth like gross domestic product (GDP), exports and imports of Pakistan by
applying different econometric tests like Augmented Dickey Fuller (ADF) Unit Root Test, Johansen
Cointegration Test, Vector Error Correction Model (VECM) and Granger Causality Test on time
series data from 1981 to 2009. The following equation(Eq.3) presents the ARDL error correction
version. The result indicates that gross national expenditure had a positive relationship with the
growth rate. Due to Variables are stationary at different levels I (0) and I (1) we applied ARDL
approach to co-integration along with ECM to find out the long run relationship and short-run
dynamics between the selected variables. Foreign direct investment is one of the important sources
of capital inflows. Firms which feel that the goods produced in India will have a low cost, will
produce the goods and export the same to other country. The main idea is that the advantages of
long-term funding are greater than the drawbacks of temporary income loss. It is also found that FDI
is less significant to predict economic growth compared to other variables. When it comes to
understanding and incorporating different knowledge, guidance and advice are often necessary. FDI
inflows are often seen as important catalyst for economic growth in the developing countries. The
study finds no effect of FDI on economic growth neither a long run nor short run for the majority of
countries. However, FDI through acquisitions does not provide long-term benefits compared to
Greenfield investments. The GMD (Gambian money dalasi) is on a continuous gradual nose-dive.
Carkovic and Levine (2002) states that FDI is given a lot of importance by many governments,
particularly the governments of developing countries treat FDI in a very special way. It affects the
economic growth by stimulating domestic investment, increasing human capital formation and by
facilitating the technology transfer in the host countries. Khan (2007) examined the link between
foreign direct investment, domestic financial sector and economic growth for Pakistan over the
period 1972 to 2005. Baracaldo (2005) that productive FDI usually results in long lasting and stable
capital flows as they are invested in long term assets. Exchange Rate The findings as presented in
Table 1 and figure 4 above indicate the trend of foreign exchange rate values of Pakistan relative to
the US Dollar over the period of 1991-2015.
Below mentioned points explain how FDI helps in the development of the developing country. Each
paragraph in the body of the essay should contain. Moreover, the economic growth also has impact
on itself but it is not serious. Due to Variables are stationary at different levels I (0) and I (1) we
applied ARDL approach to co-integration along with ECM to find out the long run relationship and
short-run dynamics between the selected variables. Higher FDI inflows in turns fetch more educated
labour and replace the obsolete technology. Finally this study presents afew policy recommendations.
The study is based on the standard neoclassical growth model and find a strong causal link between
FDI to GDP in both short and long run. According to the results, in case of developing countries,
there is no clear association between the growth impact of FDI and the level of per capita income,
education, financial market development and the degree of openness. The study reveals that the
ancillary advantages of such investment - knowledge and management relocation; market attainment
and skills improvement can be considerable for individual companies. These findings would be an
example for other small open economies with similar economic characteristics. The results obtained
from the study show that there exists a positive relationship between foreign direct investment and
economic growth. But measures introduced by the government to liberalize provisions relating to
FDI in 1991 increased FDI Rs.2705 crores in 1990 to Rs.123378 crores in 2010. The findings of the
study show that Pakistan FDI plays a pivotal role in the economic development of Pakistan, so it is
recommended that the government’s outward looking strategy should include foreign direct
investment as an essential part in addition to export promotion strategy. 4. Methodology and Data
Secondary data sources are used to assess the impact of FDI on the economic growth of Pakistan. It
is not only an important source of capital inflows but also a major source of technology transfers in
the host country. In brief, our results show that there is a positive relationship between FDI and GDP
in Pakistan. Lee, B-H, Organization for Economic Co-operation and Development (2002) revealed
about Koreas experience with external FDI. By applying Autoregressive Distributed Lag- Error
Correction Model (ARDL-ECM) technique, he found that FDI has a significant impact on the
economic growth of Pakistan both in short run and long run. Therefore assuredly, FDI is an
economic boon for the nation. The empirical results find that the relationship between gross domestic
product and foreign direct investment is a positive sign at 1% significant level. For example, the
research will use ratio measurement to compare fdi inflow to developing countries in the years 2005,
2006 and 2007. There might be too much traffic or a configuration error. Through interviews it is
possible to find out certain important things relevant to the studies that cannot be obtained or
observed directly. After liberalization of Trade policies in India, there has been a positive GDP
growth rate in Indian economy. Additionally, it promotes enhanced productivity in host nations.
Hence the selected model converges to the equilibrium by adjusting 14 percent in in the first period.
FDI is the main component of any country’s economic growth; it is dependent on many economic
and non economic factors. In crores 3. Growth And Development Of Fdi On Indian Economy. It is
rationalized of applying ARDL approach to co-integration due to variables are stationary on different
levels I(0) and I(1) with small sample size. Technology transfer can be taken place in the host country
through multinational firms while spill overs could be occurred by the interaction of domestic firms
through the interaction of multinational firms with domestic firms, suppliers, customers and work
force. While private sector companies may not always prioritize infrastructure improvement
activities, FDI can provide the necessary resources for such initiatives.