Impact of Foreign Direct Investment, Rising Oil Prices, and Industry Value Added on Economic Growth of Pakistan

Authors

  • Khawaja Asif Mehmood Bahauddin Zakariya University, Multan, Pakistan
  • Ahsan Iqbal Bahauddin Zakariya University, Multan, Pakistan
  • Furrukh Bashir Bahauddin Zakariya University, Multan, Pakistan
  • Rashid Ahmad Bahauddin Zakariya University, Multan, Pakistan

DOI:

https://doi.org/10.52131/joe.2022.0402.0073

Keywords:

Foreign Direct Investment, Oil Prices, Industrial Value Added, Economic Growth

Abstract

Rising oil prices, foreign direct investment, and industrial value-added are the key component that affects the economic stature of a country. This study locates the relationship between FDI, rising oil prices, and industry value added on the economic growth of Pakistan. To do the analyses, data length ranging from 1980 to 2020 was used. For the regression results, the analytical technique of Autoregressive Distributed Lag (ARDL) is incorporated. The empirical results show that FDI encourages economic growth. Nevertheless, industry value added is also located for positive affectation on economic growth. However, rising oil prices are found to have negative effects on economic growth. Similarly, the combined effect of oil prices and FDI are found discouraging for economic growth. As a policy option, the government of Pakistan must need to encourage FDI inflows and should step up toward industrialization. On the other side, rising oil prices be controlled at the maximum extent as it is damaging to economic prosperity.

Author Biographies

Khawaja Asif Mehmood, Bahauddin Zakariya University, Multan, Pakistan

Assistant Professor, School of Economics

Ahsan Iqbal, Bahauddin Zakariya University, Multan, Pakistan

M. Phil. Scholar, School of Economics

Furrukh Bashir, Bahauddin Zakariya University, Multan, Pakistan

Assistant Professor, School of Economics

Rashid Ahmad, Bahauddin Zakariya University, Multan, Pakistan

Assistant Professor, School of Economics

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Published

2022-05-19

How to Cite

Mehmood, K. A., Iqbal, A., Bashir, F., & Ahmad, R. (2022). Impact of Foreign Direct Investment, Rising Oil Prices, and Industry Value Added on Economic Growth of Pakistan. IRASD Journal of Economics, 4(2), 204–214. https://doi.org/10.52131/joe.2022.0402.0073

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