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

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From: Social Indicators Research(Vol. 127, Issue 1)
Publisher: Springer
Document Type: Report
Length: 188 words

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To access, purchase, authenticate, or subscribe to the full-text of this article, please visit this link: Byline: Syed Jawad Hussain Shahzad (1), Muhammad Zakaria (1), Mobeen Ur Rehman (1), Tanveer Ahmed (1), Bashir Ahmed Fida (2) Keywords: FDI; Terrorism; Economic growth; Cointegration; C13; F21 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. Author Affiliation: (1) COMSATS Institute of Information Technology, Islamabad, Pakistan (2) Modern College of Business and Sciences, Muscat, Oman Article History: Registration Date: 23/03/2015 Accepted Date: 21/03/2015 Online Date: 27/03/2015

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Gale Document Number: GALE|A448243468