Foreign Direct Investment Inflows and Labor Productivity in Pakistan: A Sector-Wise Panel Cointegration Analysis


Ayesha Serfraz

Abstract


This study empirically analyzes the effects of sector-wise FDI inflows on respective sector-wise labor productivity for a panel of seven major sectors of Pakistan’s economy covering time period of 1997-2016. For empirical analysis, sector-wise FDI inflows has been used as an independent variable while sector-wise labor productivity is a dependent variable. Initial tests conclude that LSDV fixed effects model is the most appropriate test for the data being used for empirical analysis. Further tests confirm the existence of a long-run Cointegration between these two variables. Wald test shows that a uni-directional short-run causality exists, running from sector-wise labor productivity to sector-wise FDI inflows. Pair-wise Granger-Causality test further shows that the effects of FDI inflows are not limited to one sector, rather there is an evidence of spillover effect from one sector to an-other. All empirical tests conclude that sector-wise FDI inflows positively affect sector-wise labor productivity in case of Pakistan.

Keywords


Sector-wise FDI inflows, Sectors-wise labor productivity, Panel cointegration, Spillovers, Pakistan.

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About this article

Title

Foreign Direct Investment Inflows and Labor Productivity in Pakistan: A Sector-Wise Panel Cointegration Analysis

Keywords

Sector-wise FDI inflows, Sectors-wise labor productivity, Panel cointegration, Spillovers, Pakistan.

DOI

10.20448/journal.501.2018.51.1.18

Date

2018-01-30

Additional Links

Manuscript Submission

Journal

Asian Journal of Economics and Empirical Research
Vol 5, No 1 (2018) Page: 1-18

Print ISSN

2518-010X

Online ISSN

2409-2622

Statistics

315 Views | 384 Downloads

Citations

0

Authors & Affiliations

Ayesha Serfraz
Doctoral Student at University of Hamburg, Germany. Assistant Professor at University of the Punjab, Lahore
Pakistan


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Asian Journal of Economics and Empirical Research

 Online ISSN: 2409-2622 | Print ISSN: 2518-010X

 

 

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