Impact of foreign direct investment, personal remittance, and official development assistance on economic growth of Pakistan (FMOLS approach)

This research paper delves into the exploration of the influence exerted by various forms of foreign capital on the economic growth of Pakistan. Foreign capital, a crucial catalyst for economic development, serves as a conduit for technology transfer and foreign exchange earnings from developed to developing nations.The study zeroes in on Foreign Direct Investment (FDI), Personal Remittance (PR), and Official Development Assistance (ODA) as the primary types of Foreign Capital Inflows (FCIs) that could potentially bolster economic development. The analytical framework of this research employs the Endogenous Growth Model and the Fully Modified Ordinary Least Squares (FMOLS) technique to scrutinize the long-term effects of an array of factors, including FDI, domestic assets, labor, and capital, on economic growth. The study relies on data from ۲۰۰۰ to ۲۰۱۸ obtained from the World Bank and the WDI website.The findings of this study unveil several pivotal insights. Firstly, it is observed that Foreign Direct Investment (FDI) exerts a negative and statistically significant impact on economic growth. Additionally, the research identifies a positive and statistically significant correlation between labor productivity and economic growth. Lastly, capital investment emerges as the most influential factor on economic growth, evidenced by a positive and highly significant coefficient.

کلیدواژه ها:

foreign capital flows ، Economic Growth ، FMOLS ، Cointegration