GPDI constitutes one component of GDP, which politicians and economists use to gauge a country’s overall economic activity.
Therefore, there is a prerequisite to analyze that whether the concerned time series data are stationary or not. The results of unit root analysis are given in Table Before application of Johansen cointegration test, it is important to find the lag length of the VAR through some lag selection criteria in order to have parsimonious model. {{#verifyErrors}}
The time period of this study is 2006–2010. The inflow of foreign direct investment from developed to developing countries increased during last few decades.
Khan 29050, PakistanLNFDI = natural logarithm of foreign direct investment,LNDINV = natural logarithm of gross fixed capital formation (GFCF),LNGDP = natural logarithm of gross domestic product. Your feedback will be reviewed.
→ investment Pakistan is also enjoying the foreign direct investment inflow during the past three to four decades. 3 Essential Characteristics of GPDI GPDI has three main characteristics: Dictionary
English
These roles of domestic investment motivate the foreign investors to reap the benefits of high return [Like other developing countries, Pakistan is also a recipient country of bulky FDI inflow since more than three decades. The sentence contains offensive content.
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Tell us about this example sentence: This is an important source of external finance considering the deteriorated position of balance of payment. Besides foreign direct investment inflow to Pakistan and domestic investments variables, this study also used GDP as a third variable in order to avoid misspecification problems in the model and also to know the interrelationship between the variables.
Pakistan is also enjoying the foreign direct investment inflow during the past three to four decades. Technological transfer from developed countries to developing countries occurs through FDI which paves the way for economic development in developing countries. The word in the example sentence does not match the entry word. PP unit root test shows that all the variables are nonstationary at level and, however, stationary at first differenced which shows that all the variables are integrated at first order, that is, The authors declare that there is no conflict of interests regarding the publication of this paper.Copyright © 2014 Irfan Ullah et al.
The empirical findings of this study reveal the existence of long run relationship between domestic investments, foreign direct investment, and economic growth, further supported by Toda-Yamamoto causality, and bidirectional causality has been found between FDI and domestic investment implying that both domestic investment and FDI cause each other.
investment in the companies and products of someone's own country rather than in those of foreign countries: On the whole, China depends more on domestic investment and consumption than on exports to generate its growth. Nonstationarity in the series means that the series contain permanent stochastic trend which, continues over the period.
Numbers of lag selection criteria have been used in the literature, e.g., Akaike Information Criterion (AIK), Hannan-Quinn information Criterion (HQ), Sequential modified LR test statistics, Schwarz Information Criterion (SIC), Final Prediction Error (FPE).
This is an important component of GDP because it provides an indicator of the future productive capacity of the economy.
Phillips and Perron (PP) test is used to assess unit root in the concerned data series.
All these three variables are used and transformed into real form through GDP deflator = 2000-01 which further transformed into natural logarithm form. This study aims to find dynamic interaction between domestic investment, foreign direct investment, and economic growth in Pakistan for the period 1976–2010. Fixed-income investments generally pay a fixed rate of return on a fixed schedule. Add the power of Cambridge Dictionary to your website using our free search box widgets.Browse our dictionary apps today and ensure you are never again lost for words.
Clear explanations of natural written and spoken English
The data on FDI are taken from World Bank Data [First of all, PP unit root test is applied on all three data series in order to examine stationarity of the data.
Causal link can be found through Johansen cointegration test based vector error correction model (VECM) provided that cointegration prevails among the variables.
Besides foreign direct investment inflow to Pakistan and domestic investments variables, this study also used GDP as a third variable in order to avoid misspecification problems in the model and also to know the interrelationship between the variables.