We apologize for a recent technical issue with our email system, which temporarily affected account activations. Accounts have now been activated. Authors may proceed with paper submissions. PhDFocusTM
CFP last date
20 December 2024
Call for Paper
January Edition
IJCA solicits high quality original research papers for the upcoming January edition of the journal. The last date of research paper submission is 20 December 2024

Submit your paper
Know more
The week's pick
Responsive image
Improved Shuffled Frog Leaping Algorithm with Self-Adaptive Shuffling for Fuzzy Logic PD+G Controller Optimization in Robotic Manipulators

Duc Hoang Nguyen
Random Articles
Reseach Article

Foreign Direct Investment Inflows in Pakistan: A Time Series Analysis with Autoregressive Distributive Lag (ARDL) Approach

by Sober Mall
journal cover thumbnail

International Journal of Computer Applications
Foundation of Computer Science (FCS), NY, USA
Volume 78 - Number 5
Year of Publication: 2013
Authors: Sober Mall
10.5120/13483-1186

Sober Mall . Foreign Direct Investment Inflows in Pakistan: A Time Series Analysis with Autoregressive Distributive Lag (ARDL) Approach. International Journal of Computer Applications. 78, 5 ( September 2013), 7-16. DOI=10.5120/13483-1186

@article{ 10.5120/13483-1186,
author = { Sober Mall },
title = { Foreign Direct Investment Inflows in Pakistan: A Time Series Analysis with Autoregressive Distributive Lag (ARDL) Approach },
journal = { International Journal of Computer Applications },
issue_date = { September 2013 },
volume = { 78 },
number = { 5 },
month = { September },
year = { 2013 },
issn = { 0975-8887 },
pages = { 7-16 },
numpages = {9},
url = { https://ijcaonline.org/archives/volume78/number5/13483-1186/ },
doi = { 10.5120/13483-1186 },
publisher = {Foundation of Computer Science (FCS), NY, USA},
address = {New York, USA}
}
%0 Journal Article
%1 2024-02-06T21:50:47.538325+05:30
%A Sober Mall
%T Foreign Direct Investment Inflows in Pakistan: A Time Series Analysis with Autoregressive Distributive Lag (ARDL) Approach
%J International Journal of Computer Applications
%@ 0975-8887
%V 78
%N 5
%P 7-16
%D 2013
%I Foundation of Computer Science (FCS), NY, USA
Abstract

Estimating a model of foreign direct investment has been one the central elements of FDI policy makers in Pakistan. This paper attempts to model, Determinants of Foreign Direct Investment Inflow in Pakistan: A Time Series Analysis with Auto Regressive Distributive Lag (ARDL) approach using the time series data for the period 1977 to 2010. However in a specification, FDI is found important with the elasticity of GDP growth rate 10% level of significance and infrastructure at 1% level of significance. These factors show do not show better performance in short-run dynamics like only infrastructure is elastic with FDI at 1% level of significance. Stability tests of the paper do not contain any serious structural change in the model as case of and CUSUM and CUSUMSQ statistics show the critical value lines lying inside the bounds, presenting the model is stable.

References
  1. Harrod, R. F. (1939). An Essay in Dynamic Theory, The Economic Journal, 49, 14-33.
  2. Domar, E. D. (1946). Capital Expansion, Rate of Growth, and Employment, Econometrica, 14, 137-147.
  3. Bandera, V. N. , & White, J. T. (1968). U. S. Direct Investments and Domestic Markets in Europe, Economia Internazionale. 21, 117–133.
  4. J. B. Ramsey (1969) Tests for Specification Errors in Classical Linear Least Squares Regression Analysis. Journal of the Royal Statistics Society, series B, vol. 31, 1969, pp. 350-371.
  5. Schmitz, A. , &. Bieri (1972). EEC Tariffs and U. S. Direct Investment, European Economic Re-view. 3: 259 – 270.
  6. McKinnon, R. I. , (1973). Money and Capital in Economic Development, Brookings Institution, Washington, DC.
  7. Bowers, W. and Pierce, G. (1975), The illusion of deterrence in Isaac Ehrlich's work on the deterrent effect of capital punishment, Yale Law Journal, 85, 187-208.
  8. Brecher, R. and C. Diaz-Alejandro, (1977), Tariffs, Foreign Capital and Immiserizing Growth, Journal of, International Economics, 7, 317-322.
  9. Ehrlich, I. , (1977), The Deterrent Effects of Capital Punishment Reply, American Economic Review, 67, 452-58.
  10. Kojima, K. (1978). Direct Foreign Investment: A Japanese Model of Multinational Business Operations. London: Croom Helm.
  11. Root, F. R. , and Ahmed, A. (1979). Empirical Determinants of Manufacturing Direct Foreign Investment in Developing Countries, Economics Development and Cultural Change, 27, 751-767.
  12. Dickey D. A. and Fuller W. A (1979), Distributions of the estimators for autoregressive time series with a unit root, Journal of American Statistical Association, 74: 427- 431.
  13. Dickey, D. A and W. A. Fuller (1981), Likelihood ratio statistics for autoregressive time series with a unit root. Econometrica, 49, pp. 1057-1072.
  14. Brecher, R. (1983), Second-Best Policy for International Trade and Investment, Journal of International Economics, 14, 313-320.
  15. Engle, R. , and C. Granger (1987) Cointegration and Error Correction: Representation, Estimation, and Testing. Econometrica 55, 251–276.
  16. Phillips, P. C. B. and P. Perron (1988) Testing for a Unit Root in Time Series Regression, Biometrika, 75, 335–346.
  17. Johansen, S. (1988) Statistical Analysis of Cointegration Vectors, Journal of Economic Dynamics and Control 12.
  18. Johansen, S. , & Juselius, K. (1990). Maximum Likelihood Estimation and Inference on Co-Integration with Application for the Demand for Money. Oxford Bulletin of Economics and Statistics, 52, 169-210.
  19. Romer, P. (1990). Endogenous Technological Change, Journal of Political Economy, 98(5), S71-102.
  20. Wang, J. Y. (1990). Growth, Technology Transfer, and Long-Run Theory of International Capital Movements, Journal of International Economics, 29(3-4), 255-271.
  21. Johansen, S. (1991) A Statistical Analysis of Cointegration for I(2) Variables, University of Copenhagen.
  22. Grossman, G. M. & Helpman, E. (1991). Innovation and Growth in the Global Economy. Cambridge MA: The MIT Press.
  23. Wheeler, D. , & Mody A. (1992). International investment location decisions: the case of U. S. firms, Journal of International Economics, 33, 57-76.
  24. Mankiw, G. , Romer D. and Weil, D. , (1992). A Contribution to the Empirics of Economic Growth, Quarterly Journal of Economics, 152, 407-437.
  25. Boyd, J. H. and Smith, B. D (1992). Intermediation and the Equilibrium Allocation of Investment Capital: Implications for Economic Development, Journal of Monetary Economics, 30, 409-432.
  26. Ruffin, R. J. (1993). The Role of Foreign Investment in the Economic Growth of the Asian and Pacific Region. Asian Development Review, 11(1), 1-24.
  27. Atje, Raymond and Boyan and Jovanovic (1993). Stock Markets and Development, European Economic Review, 37 (2/3), 632-40.
  28. Bhagwati, J. N. (1994), Free trade: Old and new challenges, Economic Journal, 104, 231-246.
  29. Barro, R. J. and Lee, J-W. (1994). Source of Economic Growth, Carnegie-Rochester Conf Ser Public Policy 40, 1-46.
  30. Johansen, S. (1995) Likelihood Based Inference in Cointegrated Vector Auto-regressive Models, Oxford: Oxford University Press.
  31. Demirgue-Kunt, A. and Levine R. (1996a), Stock Market Corporate Finance and Economic Growth: An Overview, The World Bank Review, 10(2): 223-239.
  32. Demirgue-Kunt, A. and R. Levine (1996b), Stock Market Development and Financial Intermediaries: Stylized Facts, World Economic Review, 10(2): 291-321.
  33. Pesaran, M. H. , Shin, Y. , & Smith, R. J. (1996). Testing for the 'Existence of a long-mn relationship, Faculty of Economics, University of Cambridge, Cambridge Working Papers in Economics 9622.
  34. MacKinnon, James G. (1996) Numerical Distribution Functions for Unit Root and Cointegration Tests, Journal of Applied Econometrics, 11, 601-618.
  35. Kumar, Nagesh, and N. S. Siddharthan(1997). Technology, Market Structure and Internationalization: Issues and Policies for Developing Countries, Routledge and UN Press, London and New York.
  36. Pesaran, H. , & Pesaran, B. (1997). Microfit 4. 0 interactive econometric analysis. Oxford: Oxford University Press.
  37. Walz, U. (1997). Innovation, Foreign Direct Investment and Growth. Economica, 64, 63-79.
  38. Bannerjee, A. , J. Dolado, and Mestre, R. (1998), Error Correction Mechanism Tests for Co-integration In Single Equation Framework, Journal of Time Series Analysis, 19, pp. 267-83.
  39. Kinoshta, Y. (1998). Micro-determinants of Japanese Foreign Direct Investment in Asia, Eastern Economic Association and Japan Economic Seminar at Columbia University.
  40. Khan, H. A. , & Kim, Y. (1999), EDRC (Report Series No. 66)
  41. Markusen, J. & Venables, A. (1999). Foreign Direct Investment as a Catalyst for Industrial Development, European Economic Review, 43(2), 335-56.
  42. Morrisset, P. (2000). Foreign Direct Investment to Africa: Policies also Matter, Transnational Corporation, 9(2), 107-125.
  43. Akhar, H. M. (2000). The determinants of FDI in Pakistan: An Econometrics Analysis, The Lahore Journal of Economics, 5:1.
  44. Pistoresi, B. (2000). Investimenti diretti esteri e fattori di localizzazione: L'America Latina e il Sud Est asiatico, Rivista di Politica Economica, 90, 27– 44.
  45. Kumar, N. (2001). Infrastructure Availability, Foreign Direct Investment Inflows and Their Export-orientation: A Cross-Country Exploration. Research and Information System for Developing Countries, New Delhi, November 2001.
  46. Pesaran, H. M. , Shin, Y. , & Smith, R. J. (2001). Bounds Testing Approaches to the Analysis of Long-Run Relationships, Joumal of Applied Econometrics, 16, 289-326.
  47. Pradhan, & Prakash, J. (2001). Foreign Direct Investment and Economic Growth: The Case of Developing Countries, Unpublished M. Phil Dissertation submitted to Jawarhlal Nehru University, New Delhi
  48. Seid, S. H. (2002). Global Regulations of Foreign Direct Investment. 131 Main Street Burington, VT 05401-5600 USA, Ashgate Publishing Company
  49. Carkovic, Maria, and Ross Levine (2002), Does Foreign Direct Investment Accelerate Economic Growth? Department of Finance Working paper, University of Minnesota.
  50. Claessens, S. , Daniela KL. , and Schmukler, S. L. (2002-03), 'The future of Stock Exchanges in Emerging Markets- Evolution and Prospects', Brookings-Wharton Papers on Financial Services 2002, The Brookings Institution, Washington, D. C. , 167-212.
  51. Claessens, Stijn, Daniela K. , and Schmukler, S. , (2002), 'FDI and Stock Market Development: Complements or Substitutes?', Conference Paper, Washington DC October 3-4, 2002.
  52. Asiedu, E. (2002). On the determinants of foreign direct investment to developing countries: is Africa different? World Development, 30(1), 107-118.
  53. Prasad, E. , K. Rogoff, S. Wie and A. Kose (2003) Effects of Financial Globalization on Developing Countries: Some Empirical Evidence, IMF Occasional Paper No. 220, (Washington International Monetary Fund).
  54. Sekkat and Veganzones-Varoudakis (2004). Trade and Foreign Exchange Liberalization, Investment Climate and FDI in the MENA Countries. Working Papers DULBEA, University of Oxford: Oxford.
  55. Aqeel, A. , & Nishat M. (2004). The determinants of foreign direct investment in Pakistan. The Pakistan Development Review, 43(4) II, 651-664.
  56. Cypher, J. M. & Dietz, J. L. (2004). The Process of Economic Development (2nd ed. ), London and New York: Routledge.
  57. Zaidi, H. H. (2004). "Snags in Inflow of FDI", DOWN-Business 09 August, 2004, Available at http://www. down. com/2004/08/09/ebr7. htm
  58. State Bank of Pakistan (2005). Handbook of Pakistan Economy 2005, available at http://www. sbp. pk. org/departments/stats/PakEconomy_Handbook/Index. htm
  59. Anjum Aqeel (2005). The Determinants of Foreign Direct Investment in Pakistan, Submitted for 20th Annual PSDE conference to be held on 10-12 January 2005, Islamabad.
  60. Fritz Foley C. , Mihir A. Desai and James R. Hines Jr. (2005), Foreign Direct Investment and the Domestic Capital Stock, American Economic Review Papers and Proceedings 92, no. 2 (May 2005): 33-38.
  61. Quazi, R. (2005), Economic Freedom and Foreign Direct Investment in East Asia, College of Business, Prairi View A&M University, Prairi View Texas 77446. USA International Academy of Business and Public Administration Disciplines (IABPAD) Meetings.
  62. Mlambo, K. (2006). Reviving Foreign Direct Investments in Southern Africa: Constraints and Policies, African Development Review, 17(3), 552-579.
  63. Asiedu, E. (2006). Foreign direct investment in Africa: the role of government policy, institutions and political instability. World Economy, 29(1), 63-77.
  64. Sahoo, P. (2006). Foreign Direct Investment in South Asia: Policy, Trends, Impact and Determinants, ADB Institute Discussion Paper No. 56.
  65. Khan, M. A. (2007). Foreign Direct Investment and Economic Growth: The Role of Domestic Financial Sector. Pakistan Institute of Development Economics (PIDE) Working Paper 18.
  66. Kyereboah-Coleman A, Tettey KA (2008). Effects of Eschange Rate Volitility on Foreign Direct Investment in Sub-Saharan Africa: The case of Ghana, J. Risk Finan. , 09(01): 52-70.
  67. Russ KN (2008). Eschange Rate Volitility and First Time Entry By Multinational Firms. National Bureau of Economic Research Working Paper Series, wp/13659.
  68. Zhang, H. K. (2008). What attracts Foreign Multinational Corporations to China?, Contemporary Economic Policy, 19(3), 336-346.
  69. Chowdhry A, Wheeler M (2008), Does Real Exchange Rate Volitility Affect Foreign Direct Investment? Evidence from Four Developed Economies. Int. Trade J. , 22(02).
  70. Chousa, Juan P. , Krishna, C. and Tamazian, A. (2008). Does Growth & Quality of Capital Markets Drive Foreign Capital? William Davidson Institute Working paper Series, University of Michigan, Stephen M. Ross Business School. 911 No.
  71. Kok, R. , & Ersoy, A. B. (2009). Analyses of FDI determinants in developing countries. International Journal of Social Economics, 36(1/2), 105 - 123.
  72. Nuzhat Falki (2009). Impact of Foreign Direct Investment on Economic Growth of Pakistan, International Review of Business Research Papers, Vol. 5, No. 5, September 2009, pp. 110-120.
  73. State Bank of Pakistan (2005), Annual Reports 2008-09: The State of Pakistan's Economy, Volume-I, State Bank of Pakistan: Karachi.
  74. de la Torre, Augusto de la, Gozzi, Juan Carlos, and Schmukler, Sergio L. (2007), Stock Market Development under Globalization: Whither the Gains from Reforms? Policy Research working paper No. wps4184, World Bank.
  75. Desai, Mihir A, Foley, C. Fritz, James R. and Jr. Hines (2007), Foreign Direct Investment and the Domestic Economic Activity, NBER Working paper No 11717.
  76. Ogunleye (2009). Exchange Rate Volatility and Foreign Direct Investment in Sub Saharan Africa: Evidence from Nigeria and South Africa, PhD Dissertation Extract: African Center for Economic Transformation.
  77. Rukhsana Kalim (2009). Impact of Foreign Direct Investment on Stock Market Development: The Case of Pakistan, 9th Global Conference of Business and Economics, Cambridge University, UK, ISBN: 978-0-9742114-2-7.
  78. Adam, Anokye, M. and Tweneboah, George (2009). Foreign Direct Investment and Stock Market Development: Ghana's Evidence, International Research Journal of Finance and Economics, 26. pp. 179-185.
  79. Chege E (2009). Exchange Rate Volitility Effects on Inward Foreign Direct Investments in Emerging Markets, Maastricht University Masters of Science in International Business.
  80. Shafiun Nahin Shimul (2009). An Examination of the FDI and Growth Nexus in Bangladesh: Engle Granger and Bounds Testing Cointegration Approach, BRAC University Journal, vol. VI, no. 1, 2009, pp. 69-76.
  81. Khadaroo, A. J. , & Seetanah, B. (2010). Transport infrastructure and foreign direct investment. Journal of International Development, 22, 103-123.
  82. Muhammad SALAHUDDIN (2010). A Note on Causal Relationship between FDI and Savings in Bangladesh, Theoretical and Allied Economics, Volume XVII (2010), No. 11(552), pp. 53-62.
  83. Ahmad Ghazali (2010). Analysing the relationship between Foreign Direct Investment, Domestic Investment and Economic Growth for Pakistan, International Research Journal of Finance and Economics, ISSN 1450-2887, Issue 47 (2010).
  84. Muhammad Shahbaz (2010). Foreign Capital Inflow Growth Nexus and Role of Domestic Financial Sector: An ARDL Cointegration Approach for Pakistan, M. S. and M. M. R. / Journal Economic Research, 15 (2010), 202-231.
  85. Muhammad Shahbaz (2010). Foreign Direct Investment and Economic Growth Nexus and Role of Domestic Financial development in Portugal.
  86. Hafeez-ur-Rehman (2010). Impact of Foreign Direct Investment Inflow on Equilibrium Real Exchange Rate of Pakistan, A Research Journal of South Asian Studies, Vol. No. 25, No. 1, January-June 2010, pp. 125-141.
  87. G. Jayachandran (2010). A causal relationship between Trade, Foreign Direct Investment and Economic Growth in India, International Research Journal of Finance and Economics, ISSN 1450-2887 Issue 42 (2010).
  88. Nazima Elahi (2011). Exchange Rate Volatility and Foreign Direct Investment (FDI) Behavior in Pakistan: A Time Series Analysis with Autoregressive Distributive Lag (ARDL) Application, Africal Journal of Business Management Vol. 5(29), pp. 11656-11661, 23 November, 2011.
  89. Nazima Elahi (2011). Testing the Joint Impact of Foreign Aid and Foreign Direct Investment on Overtime Economic Growth of Pakistan, 2nd International Conference of Business and Economic Research (2nd ICBER 2011), Proceeding.
  90. Muhammad Muazzam Mugal (2011). Does market size affect FDI? The case of Pakistan, Interdisciplinary Journal Of Contemporary Research In Business, Vol. 2, No. 9, Listed In ULRICH'S.
  91. Muhammad Arshad Khan (2011). Foreign Direct Investment in Pakistan: The Role of International Political Relations, University of Oxford, Department of International Development, ISSN 2045-5119.
  92. Dr. Ch. Abdul Rehman (2011). The impact of infrastructure on foreign direct investment: the case of Pakistan. International Journal of Business and Management, Vol. 06, No. 5; May 2011.
  93. Muhammad Tahir Mahmood (2012). The Impact of FDI on Economic Development of Pakistan. Journal Social and Development Sciences, Vol. 3, No. 2, pp. 59-68, Feb 2012, (ISSN 2221-1152).
  94. Haider Mahmood and A. R. Chaudhary (2012). Foreign Direct Investment-Domestic Investment Nexus in Pakistan, Middle–East Journals of Scientific Research 11 (11): 1500-1507, 2012, ISSN 1990-923.
Index Terms

Computer Science
Information Sciences

Keywords

Foreign Direct

Powered by PhDFocusTM