ARDL – Analysis of the Relationship among Exports, FDI, Current Account Deficit and Economic Growth in Pakistan

Author

SDM, Education Department, Dera Ismail Khan, Pakistan

Abstract

This paper empirically examines the relationship among exports, foreign direct investment, current account deficit, and economic growth in Pakistan during 1975-2016. We adopted the autoregressive distributed lag (ARDL) approach to co-integration together with ECM techniques to trace long-run and short-run relationships. The results demonstrate a positive and significant relationship between exports, foreign direct investment, and economic growth in Pakistan in the long and short-run. In contrast, results depict that the current account deficit is negatively and significantly correlated to economic growth in the long-run and short-run. Furthermore, the Granger causality test reports the unidirectional causality from exports to economic growth.

Keywords

References

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Iranian Economic Review
Volume 24, Issue 2
May 2020
Pages 393-414

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