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Amir Sohail
Muhammad Azeem*
Hafiz Sohail Younus
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Muhammad Azeem*
Hafiz Sohail Younus
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World Journal of Economic and Finance

Impact of foreign direct investment on economic growth in Pakistan

Hafiz Sohail Younus, Amir Sohail, M Azeem

Accepted 25 March, 2014.

Citation: Younus HS, Sohail A, Azeem M (2014). Impact of Foreign Direct Investment on Economic Growth in Pakistan. World J. Econ. Finance. 1(1): 002-005.

Copyright: © 2014 Azeem et al. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are cited.


The paper examined the Impact of foreign direct investment (FDI) on economic growth in Pakistan. The study has used data from 2000 to 2010 by using Two- Stage least squares method of simultaneous equations estimation. The results show that there exists a positive relationship between economic growth, proxies by gross domestic product (GDP) and FDI in Pakistan. Domestic investment, exports size and political stability were found to be very appropriate in location choice of FDI in Pakistan. For the enhancement of foreign direct investment in Pakistan, government should ensure political stability and encourage more domestic investment. Government should also concentrate on the policies of attracting FDI and trade liberalization in Pakistan to gain more from the foreign investments. Pakistan is on the road of economic escalation and requires lots of foreign monetary contributions to cope the potential.  

Keywords: FDI, GDP, Exports Growth, Domestic Investment