Domestic Investment, Foreign Direct Investment, and Economic Growth Nexus: A Case of Pakistan

Ullah, Irfan; Shah, Mahmood; Khan, Farid Ullah

doi:10.1155/2014/592719

Cited by 48 publications

(49 citation statements)

References 14 publications

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“…Many studies revealed the role of FDIs in the economic growth in the developing or less-developed countries, through technological spillovers in the host economy. Ullah, Shah, and Ullah Khan (2014) and Ghazali (2010) found similar results in Pakistan and bidirectional causality has been found between FDIs and domestic investments. A unidirectional causality is found between FDIs and economic growth and all these findings show that FDIs supports both domestic investment and economic growth in Pakistan.…”

Section: Literature Reviewmentioning

confidence: 70%

Consumption vs. Investments for stimulating economic growth and employment in the CEE Countries – a panel analysis

Rădulescu

Şerbănescu

Sinisi

2019

Economic Research-Ekonomska Istraživanja

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The aim of this paper is to find out if the high economic growth rates achieved by the CEE countries are based either on consumption or on investments, considering many exogenous factors that impact on the economic growth and how these factors can contribute to the employment process in the CEE economies to stress if these trends of economic growth and employment are sustainable in the long run. We performed two Panel Least Squares and Pool Least Squares estimations to determine the impact of the exogenous variables on the economic growth (as GDP per capita growth) and on the unemployment rate in the short and long run, depending on the lags of the exogenous variables used in the analysis. We used yearly data series during 2004-2017 for eight selected CEE countries. Our results show that private consumption is positively related with economic growth in the short run, but it doesn't support the job creation process, in the same way as the savings rate can't determine positive effects on the employment. Public spending is strongly and negatively correlated with economic growth and positively correlated with the unemployment rate in the CEE region, while the net export is weakly impacting on the economic growth in the CEE region and doesn't support the employment process in this area. The impact of the domestic investments on the economic growth is weaker in the CEE area than the impact of both private and public spending, but they are positively correlated with the economic growth and negatively correlated with the unemployment rate, while the correlation of the foreign direct investments (FDIs) with both economic growth and unemployment is very weak, as it is the case of net exports. We conclude that the economic growth in the CEE area is mainly based on the private consumption in the short run but the private consumption doesn't support the job creation process either in the long run or in the short run. The qualitative factors included in the analysis by using global competitiveness index (corruption control, bureaucracy, infrastructure quality, governance effectiveness, political stability, ARTICLE HISTORY

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Section: Literature Reviewmentioning

confidence: 70%

Consumption vs. Investments for stimulating economic growth and employment in the CEE Countries – a panel analysis

Rădulescu

Şerbănescu

Sinisi

2019

Economic Research-Ekonomska Istraživanja

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“…Saaed and Hussain (2015), Zeren and Ari (2013), Hatemi-J and Irandoust (2000), Yücel (2009) and Kar et al (2014) investigate the causal effects between trade openness and economic growth and the findings show that trade openness have a positive and significant effect on growth. Ullah et al (2014) investigated the relationship between domestic investment, foreign direct investment, and economic growth in Pakistan for the period 1976-2010. The findings pinpointed the existence of a long run relationship between foreign direct investment and economic growth.…”

Section: Literature Reviewmentioning

confidence: 99%

Foreign Direct Investment, Trade Openness and Economic Growth: A Panel Data Analysis for Sub-Saharan Africa

Çınar¹,

Nulambe²

2018

berj

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This paper examines the impact of foreign direct investment and trade openness on economic growth for 34 Sub-Saharan African countries. The methodology involves estimating the augmented endogenous growth model using panel data that runs from 2006 to 2015. The coefficients of the estimated REM model are statistically significant with all the signs compatible as expected. Our findings show that all the variables are significant in explaining SSA growth. Specifically, foreign direct investment and trade openness positively impact growth except inflation with a negative effect on growth. This study will assist the policy makers to increase effort towards the creation of favorable business climate that attract more foreign direct investment to SSA and enhance long term growth.

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“…In addition, there have been inflows of Foreign Direct Investment (FDI) and increase in the level of domestic investment in developing economies. The foreign direct investment inflows to developing countries have also increased during the last four decades (Ullah, Shah & Khan, 2014). But recently, statistics have shown that FDI inflows to Africa declined from US $50.4 billion in 2016 to US $42 billion in 2017 (a 21% drop) (UNCTAD, 2018).…”

Section: Introductionmentioning

confidence: 99%

“…For instance, Oyedokun and Ajose (2018), Lautier and Moreaub (2012), Alfa and Garba (2012) and Bakari (2017), among others have investigated whether domestic investment can significantly attract foreign investment in developing countries. Some scholars have investigated the interactions between foreign investment, domestic investment and economic growth in individual developing countries (Ullah, Shah & Khan, 2014;Lautier & Moreaub, 2012;Kukaj & Ahmeti, 2016). Other scholars have also examined the effect of foreign direct investment on economic growth of developing and developed countries using panel data (Alvarado, Iñiguez & Ponce, 2017;Iamsiraroj, 2016;Agbloyor, Gyeke-Dako, Kuipo & Abor, 2016;Adams & Opoku, 2015;Gui-Diby, 2014;Ndikumana & Verick, 2008;Sukar, Ahmed & Hassan, 2007).…”

Section: Introductionmentioning

confidence: 99%

The Growth-Differential Effects of Domestic Investment and Foreign Direct Investment in Africa

Ijirshar

Anjande

Fefa

et al. 2020

CBN-JAS

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This paper employs dynamic panel models; Pooled Mean Group (PMG) and Mean Group (MG) estimators to assess the growth-differential effects of Foreign Direct Investment (FDI) and Domestic Investment (DI) among 41 selected African countries from 1970 to 2017. The result of Hausman test shows that PMG estimator is preferred. The study found that FDI and DI are important grease for growth of African countries in the long-run. The study also found that inflows of FDI crowds-in DI in Africa and that there is significant difference in the growth effects of foreign direct investment and domestic investment while the joint effects of foreign direct investment and domestic investment on growth of African countries is found to be statistically significant. In the short-run, estimates show that foreign direct investment has negative influence on growth of 24 countries out of which four (Benin, Madagascar, Nigeria and Equatorial Guinea) are highly significant at 5% level, while the estimated influence of domestic investment on growth of most African countries was positive. This shows that foreign direct investment in Africa has negative effects on growth of host economies in the short-run. The study recommends that African governments should continually encourage domestic savings and investment as major source of growth and only consider FDI as a growth supplement.

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Domestic Investment, Foreign Direct Investment, and Economic Growth Nexus: A Case of Pakistan

Cited by 48 publications

References 14 publications

Consumption vs. Investments for stimulating economic growth and employment in the CEE Countries – a panel analysis

Consumption vs. Investments for stimulating economic growth and employment in the CEE Countries – a panel analysis

Foreign Direct Investment, Trade Openness and Economic Growth: A Panel Data Analysis for Sub-Saharan Africa

The Growth-Differential Effects of Domestic Investment and Foreign Direct Investment in Africa

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