The Nexus of Foreign Direct Investment, Economic Growth and Environment in Pakistan

Syed Sundus Raza, Anwar Hussain


This paper estimate the impact of sectoral FDI on economic
growth and carbon dioxide emissions in Pakistan. To this end, it uses
time series secondary data from 1972 to 2011 and applies Auto Regressive
Distributed Lag (ARDL) models. The results showed that FDI inflows in
manufacturing, transport, storage and communication sectors and energy
consumption have positive effect on the GDP growth of Pakistan. Besides,
FDI inflow in manufacturing, transport, storage and communication sector
and population density are responsible for the CO2 emissions in
Pakistan. The results also validate Environmental Kuznet Curves in both
long and short run. JEL Classification: E2, O4, Q5 Keywords: Sectoral
FDI, CO2 emissions, Environmental Kuznet Curves, Gross Domestic Product

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