Volume 11 - Volume 11
How Trade Openness and Foreign Direct Investment Affect Economy of Pakistan
Abstract
This study is intended to find out how and to what extent FDI and trade openness affect the growth of economy in Pakistan for time span 1980-2018. To examine influence of FDI and trade openness, GDP was used by way of dependent variable whereas FDI, trade openness, exchange rate, and inflation are also taken as independent variables. The ARDL technique is employed in following study to estimate short-run and long-run results. This study concludes that TO have a positive momentous influence on GDP in both long and short run. While Foreign Direct Investment has an optimistic but irrelevant influence on GDP in Pakistan which demonstrates that TO has a more progressive influence on GDP of Pakistan than FDI. Other variables labor force and inflation harm economic growth while the exchange rate affects GDP positively. It is suggested by the study to enhance economic growth, govt should focus on liberalization of trade by reducing tariffs, customs duties, and other types of taxes on exports to enhance the economic growth of Pakistan.
Paper Details
PaperID: 1787
Author's Name: Noreen Safdar, Malka Liaquat, Naureen Afzal and Sajda Timsal
Volume: Volume 11
Issues: Volume 11
Keywords: Trade Openness, FDI, Exchange Rate, GDP.
Year: 2021
Month: April
Pages: 1641-1653