Does Sustainable Development Promote Foreign Direct Investment in Pakistan? An ARDL Analysis

Authors

  • Muhammad Ramzan Sheikh Bahauddin Zakariya University, Multan, Pakistan
  • Mehjabeen Ali Higher Education Department, Punjab, Pakistan
  • Rashid Ahmad Bahauddin Zakariya University, Multan, Pakistan
  • Furrukh Bashir Bahauddin Zakariya University, Multan, Pakistan

DOI:

https://doi.org/10.52131/joe.2022.0404.0105

Keywords:

Foreign direct investment, Sustainable development, Exchange rate, Broad money, Trade

Abstract

Foreign direct investment (FDI) has become a cornerstone for the public and private sectors, especially in developing countries as it can enhance social overhead capital and employment opportunities. This study examines the association between sustainable development and foreign direct investment in Pakistan over the period 1972-2021 by using the ARDL estimation technique. The study has used various variables i.e., foreign direct investment, sustainable development index, tax, exchange rate, credit, broad money and trade. The findings reveal that exchange rate, credit, broad money and trade are positively related to foreign direct investment while the tax has a negative effect on FDI. The study also points out that there is a long-run association between sustainable development and FDI. The study recommends that policymakers may enhance foreign direct investment through sustainable development, taxes reduction, financial development, exchange rate stability and trade in Pakistan.

Author Biographies

Muhammad Ramzan Sheikh, Bahauddin Zakariya University, Multan, Pakistan

Associate Professor, School of Economics

Mehjabeen Ali, Higher Education Department, Punjab, Pakistan

Lecturer in Economics

Rashid Ahmad, Bahauddin Zakariya University, Multan, Pakistan

Assistant Professor, School of Economics

Furrukh Bashir, Bahauddin Zakariya University, Multan, Pakistan

Assistant Professor, School of Economics

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Published

2022-12-28

How to Cite

Sheikh, M. R., Ali, M., Ahmad, R., & Bashir, F. (2022). Does Sustainable Development Promote Foreign Direct Investment in Pakistan? An ARDL Analysis. IRASD Journal of Economics, 4(4), 647–657. https://doi.org/10.52131/joe.2022.0404.0105

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