FOREIGN PORTFOLIO INVESTMENT, EMPLOYMENT AND ECONOMIC GROWTH IN PAKISTAN

Author(s) : Safia Bibi, Majid Khan, Bilal Ashraf, Qianxiao Zhang, and Muhammad Adeel Khan

Abstract:

This empirical research investigates the economic effect of portfolio investment on employment and economic growth in Pakistan. The study employed the Augmented Dickey-Fuller test and the Johansen co-integration technique on annual data sets from the year 1982 to 2019. The variables include labor force, trade openness, employment, portfolio investment, secondary school enrolment, inflation, and gross fixed capital formation. This study's significant findings suggested that portfolio investment has a confident impact on economic growth (GDP) and employment. The GDP growth rate is positively related to the labor force, portfolio investment, gross fixed capital formation, and secondary school enrolment, but have a negative relationship with inflation. Employment has a constructive association with portfolio investment, inflation, trade openness, and secondary school enrollment while a negative relationship with the GDP growth rate.