Mehboob Ahmad

Macroeconomic factors determining FDI impact on Pakistan's growth

Purpose – The purpose of this paper is to identify major macroeconomic factors that enhance foreign direct investment (FDI) for Pakistan through the co‐integration and error correction model over a 28‐year time period, i.e. between 1980 and 2008.Design/methodology/approach – The study employed the Johansen co‐integration technique to estimate the long‐run relationship between the variables, while an error correction model was used to determine the short‐run dynamics of the system.Findings – Finding suggests that FDI has had a significant positive impact on Pakistans economic growth in the long run. For example, trade liberalization and their interactive terms have a positive effect in the short run, while a negative effect is observed in the long run upon economic growth of Pakistan. The results indicate that due to a low quality of human capital in Pakistan; the direct effect of FDI on economic growth becomes negative.Research limitations/implications – The study was limited to a few variables, includin...

Growth, Employment, Exports and Wagner’s Law: Evidence from Pakistan’s Agriculture Sector (1960–2009)

The objective of this study is to empirically examine the relationship between growth, employment, exports and their impact on gross national expenditure (as a percentage of agriculture GDP), specifically in the context of Pakistan’s agriculture sector by using the Bound Testing approach. Data sets from 1960–2009 are taken for time series analysis. The analysis demonstrates that, in the long-run, Wagner’s Law does not hold in Pakistan’s agriculture sector, as agriculture growth is negatively correlated with the share of agriculture expenditure; while, in the short-run, Wagner’s law does hold, as it supports the hypothesis. Agricultural employment tends to be a significant negative correlation with the agricultural expenditure in the long-run. However, these results disappear in the short-run. Agricultural raw material exports have a significant and positive impact on agriculture expenditures both in the short- and long-run.