The Role of Foreign Direct Investment in Pakistan’s Economic Growth and Its Impact on Employment (original) (raw)

Foreign direct investment (FDI) plays a significant role in promoting the economic growth and employment level of a country. The current study was conducted to analyze the impact of FDI on economic growth and employment level of Pakistan. Time series and secondary data were used ranging from 1990 to 2017. The data of Gross domestic product (GDP) and FDI inflow was collected from the World development data indicator (WDI), while data on employment (EMP) from international labor organization (ILO) estimates. ADF test and AR root test methods were used for FDI, GDP, and EMP. Using the regression results of the VAR model, variable relations were explained among each other with their lag values. The results of GDP L1 value show that GDP positively affects FDI, FDI LI shows that FDI positively affects FDI, and EMP L1 shows that employment positively affects FDI. Using GDP as a dependent variable, the result of FDI L2 value shows that FDI negatively affects GDP, EMP L1 value shows, employm...