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Social Indicators Research
Published in: Social Indicators Research 1/2016

27-03-2015

Relationship Between FDI, Terrorism and Economic Growth in Pakistan: Pre and Post 9/11 Analysis

Authors: Syed Jawad Hussain Shahzad, Muhammad Zakaria, Mobeen Ur Rehman, Tanveer Ahmed, Bashir Ahmed Fida

Published in: Social Indicators Research | Issue 1/2016

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Abstract

The study examines cointegration and causal relationship between FDI, terrorism and economic growth in Pakistan using quarterly frequencies for the period 1988–2010. For empirical analysis data is divided into two sub-periods i.e. pre 9/11 (1988–2001) and post 9/11 (2002–2010) periods. The results show that long run cointegration holds between FDI, terrorism and economic growth. Granger causality results indicate that there is bidirectional short and long run causality between economic growth and FDI for both sub-samples. These findings are supported by variance decomposition and impulse response analysis. The findings suggest applicability of modernization theory to explain FDI and economic growth relationship. The results also reveal that terrorism has a deteriorating impact on FDI.
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Footnotes
1
However, none of the time series should be I (2) as the calculated F-statistics cannot determine cointegration in this case.
 
2
ARDL bound testing procedure can also be specified by using \(\Delta \ln G_{t}\) and \(\Delta \ln TR_{t}\) as dependent variables. However, we have not presented these specifications to save space and given the fact that our interest is primarily in Eq. (6) only.
 
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Metadata
Title
Relationship Between FDI, Terrorism and Economic Growth in Pakistan: Pre and Post 9/11 Analysis
Authors
Syed Jawad Hussain Shahzad
Muhammad Zakaria
Mobeen Ur Rehman
Tanveer Ahmed
Bashir Ahmed Fida
Publication date
27-03-2015
Publisher
Springer Netherlands
Published in
Social Indicators Research / Issue 1/2016
Print ISSN: 0303-8300
Electronic ISSN: 1573-0921
DOI
https://doi.org/10.1007/s11205-015-0950-5

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