Abstract
This study aims to analyze the impact of Foreign Direct Investment(FDI), external debt and population growth on economic progress of Pakistan by using time series data from 1980 to 2014. It analyzes the correlation between Gross Domestic Product(GDP),FDI, external debt and population growth. Augmented Dickey Fuller test has been used to check stationarity in time series data. To evaluate the empirical results multiple regression method is used. GDP has been used as a dependent variable while FDI, external debt and population as independent variables. Findings of this paper show the positive and significant impact of FDI, and population growth on GDP but external debt has negative impact on GDP.
Highlights
Foreign direct investment is most important and effective indicator for influx of external resources all over the world
Main aim of this research is to examine the effect of foreign direct investment, population and external debt on gross domestic product of the Pakistan from 1980 to 2014 by using time series data
Second variable of this study shows the same result as previous studies shown that there is a negative relationship between external debt and GDP of an economy (Saqib, Masnoon and Rafique, 2013)
Summary
Foreign direct investment is most important and effective indicator for influx of external resources all over the world. A days FDI is very important indicator for any Impact of Foreign Direct Investment, External Debt and Population on Economic Growth of Pakistan: 1980-2014 economy because FDI plays leading role in the growth of an economy. Xiaohong (2009) conducted a study on GDP, FDI and external debt in China He gathered data from 1985 to 2008 to find benefits of using FDI and its impact on GDP in China. He found that FDI is better for China because FDI has positive and significant impact on economic growth of China.2On the other hand external debt and GDP are negatively related to each other
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