Abstract:
The main objectives of this study are to find out the impact of Pakistan Stock Exchange outperformance on economic growth. In this research KSE-100 Index, Foreign Direct Investment (FDI), Fiscal policy (Govt. expenditure) and Monetary Policy (Interest rate) are used as independent variables and GDP (Economic Growth) as dependent variable to determine the relationship of independent variables with dependent variable to achieve the study objectives. This research is done by applying the regression model and analyzed data from 1980 to 2015 (35 years). This study used secondary data from the source of State Bank of Pakistan (SBP), and the collected data analyzed by using a very popular statistical software package known as SPSS by using the techniques of descriptive statistics, correlation, regression model and multiple regression. The regression model shows the clear picture of independent variables effect on dependent variable. This study shows that KSE-100 index, FDI and Fiscal Policy have significant positive relationship with GDP, which means if these independent variable(s) increases the dependent variable (GDP) will also increase. Whereas, negative relationship exists between Monetary policy with GDP, which means increase in monetary policy will lead to decrease in GDP.
