Abstract:
Purpose- The purpose of the study is to analyze the relationship between Foreign direct investment
(FDI) and economic growth ( GDP) in Pakistan and to analyze the reason of declining FDI trends in
Pakistan and also to find out why government putting efforts to get FDI inflow in Pakistan.
Methodology/sample- the study involve the use of secondary data from World Bank and state bank
of Pakistan from the year 1960-2010. To analyze the data Minitab 17 is used and regression,
correlation, descriptive statistics were used. Scatter plot was also drawn to check the relationship
between two variables.
Findings- the analysis and comparative results clearly indicate that FDI play a key role to boost the
economic growth of Pakistan. Besides economic growth It also put many positive externalities on the
economy as compare to negative externalities. The reasons which describe the low FDI in Pakistan
are lack of certain and one policy, corruption, lack ofgovernance, energy crisis
Practical Implications- the results of the research might help the readers to understand the
importance of Foreign direct investment for economic growth and what steps should be taken to get
inflow of FDI in Pakistan. The understanding of decline in FDI can be develop and by improving
FDI, high economic growth could be achieve, so human development also improve by the growth of
economic condition.
