Impact of Foreign Direct Investment on Gross Domestic Product

Abstract

Abstract: The paper investigates the impact of foreign direct investment on Growth (GDP) for Pakistan. It studies a long run relationship between the foreign direct investment and gross domestic investment in Pakistan. By using cointegration analysis, we demonstrate that there exists a long run relationship between the two variables. The GDP is taken as dependent viable while FDI is considered as independent variables. The data used for this analysis is varying from 1980 to 2010. The result shows that there exists a long term relationship between GDP and FDI. JEL Classification: F23 F43 C23 Key words: FDI GDP Co integration Time series