THE IMPACT OF ECONOMIC INDICATORS OF PAKISTAN ON FOREIGN DIRECT INVESTMENT

Abstract

Purpose: The aim of this research is lo file the significance of foreign direct investment (FDI) with respect to GDP, inflation and trade and identifying trends in the flow of foreign direct investment (FDI) in Pakistan. The lepoit also furnishes a complete knowledge about the steps taken in order to improve the flow of foieign diiecl investment in Pakistan. The report also highlights the benefits and barriers of foreign direct investment (FDI) in Pakistan. Methodology: This research study is descriptive it includes the data of 26 years collected for all the variables chosen for this research study. The data is also tested using the statistical tool. The long run relationship between the dependent and independent variables FDI, GDP, inflation and trade are determined through regression framework. These variables are tested in order to check their significance and their combined influence on the foreign direct investment (FDI). Findings: The results of this research study clearly indicates that inflation and trade have a significant influence on the level of foreign direct investment (FDI) in Pakistan while the GDP has an insignificant influence on the level of foreign direct investment (FDI) in the country. The results of this research study will be useful for the readers in order to understand the effect of GDP, inflation and trade on the foreign direct investment (FDI) and the importance of the flow of foreign direct investment (FDI) in terms of economic development of Pakistan.