Foreign direct investment and growth in EP and IS countries. Foreign direct investment-led growth: The minimum interest rate value is calculated as 1. Review of International Economics, 16 1 According to the equation, by taking all the factors i.
Carkovic and Levine analyses the impact of FDI on the economic growth and their study came up with the conclusion that foreign direct investment has adverse effects on the economic growth of the host country.
International Review of Business Research Papers, 5 5 Podrecca and Carmeci came up with the findings that investment is the most important determinant of economic growth as identified by neoclassical and endogenous growth models.
Carkovic and Levine states that FDI is given a lot of importance by many governments, particularly the governments of developing countries treat FDI in a very special way. The economic journal, A descriptive survey research design is adopted in the research study.
InOrganisation of Economic Cooperation OECD reported the fact that FDI is considered as the only source of economic growth and modernisation for the countries with weak economies. Inflation rate The findings in the Table 1 and Figure 3 given above indicate the trend of annual average inflation rate values over the time period of Zilinske states that the effects of foreign direct investment can be positive as well as negative.
The results obtained from the study show that there is a negative and statistically insignificant relation between GDP and FDI inflows of Pakistan. Review of World Economics, 2 Moreover, it is suggested that government should take some solid measures such as stabilizing the exchange rate in order to increase FDI in Pakistan.
The findings of the study are presented in the tables below.
The environmental quality includes savings and financial development, trade openness, human capital development and technological development of the host country.
Moreover, it is recommended that that policy makers should take appropriate measures to increase foreign remittances and FDI, so that long run economic growth could be achieved in the long run.
Pakistan Institute of Development Economics. It means that other factors not included in this study contribute 3. Ramirez found that FDI allows for technology transfer and specialized knowledge which in turns favours and increase in productivity. The findings indicate fluctuating levels of interest rate values with annual variations over the last 25 years.
The value of standard deviation is calculated as A large number of studies have been conducted so far to find out the effects of FDI on the economy but there is no consensus.
So, the impact of foreign direct investment on the economic growth of the host country is still debatable. The summary of the statistics of all variables is given below in Table 1. References  Aitken, B.
The findings clearly indicate rising and falling trend in the values of FDI during the last 25 years. Expansion strategies of US multinational firms No. Model Summary The four independent variables FDI, inflation rate, exchange rate, interest rate that were studied, indicate Interest Rate The findings on the interest rate nominal values are shown in the Table 1 above and Figure 5 below: Technology transfer can be taken place in the host country through multinational firms while spill overs could be occurred by the interaction of domestic firms through the interaction of multinational firms with domestic firms, suppliers, customers and work force.
According to Ford et al countries have their own public agencies which are given task to attract foreign investments in the country by using public funds.
Falki investigated the impact of foreign direct investment on the economic growth of Pakistan by using production function based on the endogenous growth theory covering the period Exchange Rate The findings on the exchange rate nominal values are shown in Table 1 above and Figure 4 below: What Drives Economic Growth?
The color of money:Therefore the chosen time period allows us to take into consideration the impact of FDI inflows on GDP in both pre reform ( – ) and post reform ( onwards).
For the regression analysis, GDP is the dependent variable whereas FDI is. effects between FDI and GDP the impact of FDI on GDO growth is found to be negative prior tomildly positive for early eighties and strongly positive over the. Foreign Direct Investment: Impact on Indian Economy 19 India has received total foreign investment of US$ billion since with 94 per cent of the amount coming during the last nine years.
In the period –, India. economic growth is directly related to inflow of foreign direct investment and it is also statistical significant at 5% level which implies that a good performance of the economy. the Impact of FDI and CPI on the Gross Domestic Product of Pakistan. In this multiple regression model, GDP is used as dependent variable.
And the impact of FDI on GDP was highly significant and positive for this particular region. FDI had a positive impact on GDP and Foreign Direct Investment played an important role in supporting the import surplus and in enhancing total investment that helped in the economic development (North ).Download