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Barajas, A, Chami, R, Ebeke, C and Tapsoba, S (2012). Workers' Remittances: An Overlooked Channel of International Business Cycle Transmission?IMF Working Paper No. 12/251.

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Article

Impact of Foreign Financial Inflow on Economic Growth of Pakistan. Do Remittances, Foreign Aid, and ODA Behave Similarly?

1Umea University Sweden


Journal of Behavioural Economics, Finance, Entrepreneurship, Accounting and Transport. 2017, Vol. 5 No. 1, 10-18
DOI: 10.12691/jbe-5-1-2
Copyright © 2017 Science and Education Publishing

Cite this paper:
Waqas Javaid. Impact of Foreign Financial Inflow on Economic Growth of Pakistan. Do Remittances, Foreign Aid, and ODA Behave Similarly?. Journal of Behavioural Economics, Finance, Entrepreneurship, Accounting and Transport. 2017; 5(1):10-18. doi: 10.12691/jbe-5-1-2.

Correspondence to: Waqas  Javaid, Umea University Sweden. Email: waqasjavaid9@yahoo.com

Abstract

This study investigates the impact of external capital flow (Remittances, Foreign Direct Investment and Official Development Assistance) on GDP growth of Pakistan over the period 1973-2014. I apply Autoregressive distributed lag (ARDL) technique to find a long run effect and Error correction (ECM) technique for short run effect. The empirical results show that in the long run there exists a long-run relationship among the growth of gross domestic production and depend variables. The results suggest that, foreign direct investment, and Official Development Assistance have overall significant and positive impacts on GDP growth of Pakistan both in short run and in long run. Finally, Remittances have no significant role to explain the variation in the economic growth of Pakistan.

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