Lingering effects of foreign resource dependency in Pakistan: Assessing gains from domestic resources

Abstract

Purpose ─ This study explores the asymmetric effects of FDI (Foreign Direct Investment) on economic growth in Pakistan.Methods ─ This paper uses an Asymmetric Effects ARDL (Autoregressive Distributed Lag) model.Findings ─ The results show that the effects of increasing and decreasing FDI are not equal. The study concludes that reducing FDI is more beneficial for economic growth, particularly in the longer horizon. It mobilizes domestic investment and promotes financial freedom while reducing the reliance on pollution-intensive multinational corporations and taps indigenous knowledge gains.Implications ─ This study proves that self-reliance is more beneficial for the case of Pakistan.Originality ─ The researchers and policymakers are unclear about the merits and demerits of FDI as a substitute for domestic investment. Empirical studies are majorly convinced that an increase in FDI generally merits economic growth but weighs in the Pollution Haven Hypothesis and ignores the indigenous knowledge-based domestic resource.

Exploration of Role of Economic Globalization on Human Longevity

“…The results prompted that there is a negative effect of trade liberalization on the life expectancy where authors reasoned that it is due to the increase in trade of illegal and demerit goods. Munir, Meo, Younas, Arshed, and Jamil (2021) and R. M. Amjad, Rafay, Arshed, Munir, and Amjad (2021) also confirmed this case where higher foreign resource dependence and capital flight leads to lower growth of the economy. Deyshappria (2018) studied 119 countries in order to assess the role of overall globalization on the incidence of $1.90 poverty.…”

“…Here it is evident that the policies focusing on boosting the financial flows do not target the way this translates into consumption. Hence higher financial flows boost the imports of unhealthy fast-food culture which diminishes the life expectancy, further it also undermines our productivity while making us dependent on foreign resources (Munir et al, 2021).…”