Foreign capital inflows-growth nexus and role of domestic financial sector: an ARDL cointegration approach for Pakistan

Shahbaz, Muhammad and Rahman, Mohammad Mafizur (2010) Foreign capital inflows-growth nexus and role of domestic financial sector: an ARDL cointegration approach for Pakistan. Journal of Economic Research, 15 (3). pp. 207-231. ISSN 1226-4261

Official URL: http://www.JER.org.kr

Abstract

This study explores the roles of foreign capital inflows and domestic financial sector development on economic growth in the case of Pakistan. Using annual data series of World Bank and Economic Survey of Pakistan over the period of 1971-2008, ARDL bounds testing approach to cointegration and Error Correction Model (ECM) are employed for long run and short run relationships, respectively. Empirical evidence reveals that foreign capital inflows have positive effect on economic growth. Financial sector’s development and public investment stimulate economic growth. Human capital stock and inflation also contribute to economic growth positively. The present study suggests that Pakistan government should undertake financial reforms to improve the efficiency of the domestic financial sector which will ultimately increase the rate of economic growth in the country.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Copyright Asia Pacific Economic Association.
Depositing User: Dr Mafiz Rahman
Faculty / Department / School: Historic - Faculty of Business - School of Accounting, Economics and Finance
Date Deposited: 08 Dec 2010 01:59
Last Modified: 03 Jul 2013 00:06
Uncontrolled Keywords: foreign capital inflows; growth; ARDL
Fields of Research (FOR2008): 14 Economics > 1402 Applied Economics > 140202 Economic Development and Growth
14 Economics > 1403 Econometrics > 140305 Time-Series Analysis
Socio-Economic Objective (SEO2008): B Economic Development > 91 Economic Framework > 9199 Other Economic Framework > 919999 Economic Framework not elsewhere classified
URI: http://eprints.usq.edu.au/id/eprint/9046

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