The basic objective of this study is to compute the long run relationship between FDI and GDP for south ASIAN\ncountries (Pakistan, Nepal, Bhutan, India and Maldives). For this purpose, the FDI and GDP data of south Asian\ncountries is collected for the period 1991-2012.the data was analyzed by using technique of unit root test, Johnson\nco-integration and granger causality test. The unit root test (ADF) augmented test confirmed that data is not stationary\nat level but it is stationary at first difference. The Result of co integration test indicates that there exist co-integration\nequations at the 0.05 level. The granger test shows that FDI and GDP in case of Nepal cause a unidirectional causality.\nThe study will help and give guiding principle to policymaker and investor make scheme to prop up economic growth in\nPakistan which is suffering from a high ratio of unemployment.
Loading....