Nexus between economic growth and foreign private investment: Evidence from Pakistan economy

• Published in: Cogent economics & finance Vol. 9; no. 1; pp. 1 - 16
• Main Authors: Usman, Muhammad, Zamir, Aysha, Shabbir, Malik Shahzad, Arif, Ankasha
• Format: Journal Article
• Language: English
• Published: Abingdon Taylor & Francis 2021; Cogent; Taylor & Francis Ltd; Taylor & Francis Group
• Subjects: developed and emerging economies; Developed countries; Domestic markets; Economic growth; Foreign exchange rates; foreign private investment; generalized least squares; Industrialized nations; Investments; Local government; Openness; Private investment; Random effects; Taxation; Technology; Pakistan
• ISSN: 2332-2039; 2332-2039
• DOI: 10.1080/23322039.2021.1956067

This study examines the impact of economic growth along with taxes, technology, trade openness and exchange rate on the sustainability of foreign private investment (FPI) in Pakistan. This study uses random effects and generalized least squares estimators and contains data set starting from 1996 to 2017. The results indicate that the Pakistan economy has vastly positive influenced regarding the location and choice of emerging and developed countries' investment in the domestic market. Furthermore, emerging and developed economies investment increases the contribution among domestic firms to the national economy. The results, which are consistent across models, indicate that Pakistan's economy is more likely to receive FPI from emerging and developed economies, but the relative intensity of local government efforts, regardless of economic size. Moreover, an increase in likelihood will generate FPI from developed countries.