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Journal of Behavioural Economics, Finance, Entrepreneurship, Accounting and Transport. 2017, 5(1), 10-18
DOI: 10.12691/jbe-5-1-2
Open AccessArticle

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

Waqas Javaid1,

1Umea University Sweden

Pub. Date: May 18, 2017
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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

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.

Keywords:
worker remittance foreign direct investment official development assistance growth Pakistan

Creative CommonsThis work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

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