Work detail

Role of Foreign Capital Inflows in Economic Development of Pakistan

Author: Mgr. Muhammad Ali
Year: 2012 - summer
Leaders: PhDr. Jaromír Baxa Ph.D.
Consultants:
Work type: Masters
MEF
Language: English
Pages: 104
Awards and prizes:
Link:
Abstract: This study attempts to ascertain the importance of foreign capital inflows
(FCIs) in Pakistan. We do so by first finding the key determinants of FCIs
in Pakistan. Secondly, we attempt to investigate the relationship of FCIs with
economic growth and finally we study the impact of FCIs on unemployment,
poverty and income inequality. FCIs in this study are combination of foreign
direct investment, remittances, foreign aid and external debt. Using data from
1973-2008 for Pakistan we found that growth is key determinant of FCIs both
in aggregated and disaggregated forms. Moreover, FCIs have positive impact
on economic growth in Pakistan. We also found that FCIs do help in reducing
unemployment. Impact on poverty and inequality, however, was found to
be insignificant. Results suggest that though FCI is beneficial for growth, the
spillovers of the growth are not reaching the poor segment of the society. Policy
makers should therefore focus on utilizing these foreign resources, especially
remittance inflows, to strengthen domestic financial sector, reduce poverty and
inequality.
Downloadable: Diploma Theses of Ali

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