Abdul, waheed and Syed tehseen, jawaid (2010): Inward foreign direct investment and aggregate imports: time series evidence from Pakistan. Published in: International Economics and Finance Journal , Vol. 5, No. 1-2 (15. December 2010): pp. 33-43.
This is the latest version of this item.
Download (328kB) | Preview
This study investigates the impact of inward foreign direct investment (FDI) on aggregate imports in Pakistan using the annual time series data for the period 1981 to 2007. The cointegration results suggest that there exists a unique significant positive long-run equilibrium relationship between inward FDI and aggregate imports in Pakistan. The respective parsimonious short-term dynamic error-correction model also confirms a significant positive short run relationship with high speed of adjustment. The causality result shows unidirectional causality running from inward FDI to aggregate imports in the country. The sensitivity analysis confirms that the results are robust.
|Item Type:||MPRA Paper|
|Original Title:||Inward foreign direct investment and aggregate imports: time series evidence from Pakistan|
|Keywords:||Inward FDI, Imports, Cointegration, Causality|
|Subjects:||F - International Economics > F1 - Trade > F10 - General
C - Mathematical and Quantitative Methods > C2 - Single Equation Models; Single Variables > C22 - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment; Long-Term Capital Movements
|Depositing User:||Syed Tehseen Jawaid|
|Date Deposited:||12. Aug 2011 03:25|
|Last Modified:||12. Feb 2013 23:58|
Ahmed, M. H., Alam, S. and Butt, M. S. (2003), Foreign Direct Investment, Exports and Domestic Output in Pakistan, The Pakistan Development Review, 42, 715-723.
Alguacil, M. T. and Orts, V. (2003), Inward Foreign Direct Investment and Imports in Spain, International Economic Journal, 17, 19-38.
Aqeel, A. and Nishat, M. (2004), The Determinants of Foreign Direct Investment in Pakistan, The Pakistan Development Review, 43, 651-664.
Atique, Z., Ahmed, M. H. and Azhar, U. (2004), The Impact of FDI on Economic Growth under Foreign Trade Regimes: A Case Study of Pakistan, The Pakistan Development Review, 43, 707-718.
Balasubramanyam, V. N., Salisu, M. A. and Sapsford, D. (1996), Foreign Direct Investment and Growth in EP and IS Countries, Economic Journal, 106, 92-105.
de Mello, L. R. and Fukasaku, K. (2000), Trade and Foreign Direct Investment in Latin America and Southeast Asia: Temporal Causality Analysis, Journal of International Development, 7, 903-924.
Dutta, D. and Ahmed, N. (1999), An Aggregate Import Demand Function for Bangladesh: A Cointegration Analysis, Applied Economics, 31, 465-472.
Engle, R. F. and Granger, C. W. F. (1987), Cointegration and Error Correction: Representation; Estimation and Testing, Econometrica, 55, 251-76.
Inward Foreign Direct Investment and Aggregate Imports: 43 Hendry, D. F. (1980), Econometrics-Alchemy or Science, Economica, 47, 387-406.
Johansen, S. and Juselius, K. (1990), Maximum Likelihood Estimation and Inference on Cointegration with Applications to the Demand for Money, Oxford Bulletin of Econometrics and Statistics, 52, 169-210.
Johansen, S. (1988), Statistical Analysis of Cointegration Vectors, Journal of Economic Dimension and Control, 12, 231-254.
Johansen, S. (1991), Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models, Econometrica, 59, 1551-80.
Khan, M. A. (2007), Foreign Direct Investment and Economic Growth: The Role of Domestic Financial Sector, PIDE working Papers, 18. Islamabad: Pakistan Institute of Development Economics.
Khan, M. S. (1974), Import and Export Demand in Developing Countries, IMF Staff Papers, November, 678,93.
Levine, R. and Renelt, R. D. (1992), A Sensitivity Analysis of Cross Country Growth Regression, American Economic Review, 82, 942-963.
Lin A. (1995), Trade Effects of Foreign Direct Investment: Evidence for Taiwan with four ASEAN Countries, Weltwirtschaftliches Archiv, 131, 737-747.
Liu, X., Burridge, P.and Sinclair (2002), Relationships between Economic Growth, Foreign Direct Investment and Trade: Evidence from China, Applied Economics, 34, 1433-40.
Maddala, G. S. (1992), Introduction to Econometrics. Second Edition. New Jersey: Prentice Hall Inc.
Pesaran, M. H., Yongcheol, and Richard, J. (2001), Bounds Testing Approaches to the Analysis of Level Relationships, Journal of Applied Econometrics, 16, 289-326.
Sarmad, K. (1989), The Determinant of Import Demand in Pakistan, World development, 17, 1619-1625.
Shah, Z. and Ahmed, Q. M. (2003), The Determinants of Foreign Direct Investment In Pakistan: an Empirical Investigation, The Pakistan Development Review, 42, 697–714.
Toda, H. Y. and Yamamoto, T. (1995), Statistical Inference in Vector Autoregressions with Possibly Integrated Processes, Journal of Econometrics, 66, 225–250.
Yousuf, M., Hussain, Z. and Nisar, A. (2008), Economic Evaluation of Foreign Direct Investment in Pakistan, Pakistan Economic and Social Review, 46, 37-56
Available Versions of this Item
Inward foreign direct investment and aggregate imports: time series evidence from Pakistan. (deposited 14. Jun 2011 15:26)
- Inward foreign direct investment and aggregate imports: time series evidence from Pakistan. (deposited 12. Aug 2011 03:25) [Currently Displayed]