The Impact of Foreign Direct Investment on Economic Growth in Pakistan

Abstract

This work is an extension of previous researches that aimed to determine the effects of • Foreign Direct Investment on Economic Growth in Pakistan. In this study, Data (from the years from 1951-1998) relating to the variables is collected from the Statistical Reports available at the Pakistan Institute of Development Economics and the Ministry Of Finance. The measurement of Foreign Direct Investment is recorded in millions of Rupees, but ip,.7 this thesis, ; ' it is converted to percentage increases/decreases so that it could be comparable to Economic Growth (which is also measured in percentages) . Finally, the Foreign Direct Investment is correlated with Economic Growth using Pearson correlation. The results obtained show that relationship exists between Investment and Economic Growth. a weak Foreign negative Direct This proves that an increase in Foreign Direct Investment in fact causes a minute decline in Economic Growth in Pakistan. Recommendations that follow center on policy implications as well as measures that can be adopted in order to attract and encourage only that kind of Foreign Direct Investment that is conducive to Economic Growth within Pakistan.