A Time Series Mechanism of Foreign Direct Investment to the Governance of Pakistan: A New Paradigm of Analysis

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Muhammad Shahid, Rana Khalid Mehmood, Muhammad Naeem Anjum , Muhammad Saleem Khan, Waheed Ullah


The foreign direct investment phenomenon itself resolves terrorism, threats of militant groups, security challenges and governance problems of the host country. The emerging phenomenon has not debated frequently in economics. So this study contributes potential knowledge and literature on this subject matter and answers the raised question whether a foreign direct investment itself helps in creating governance of  Pakistan or not. The study analyses the phenomenon of FDI effect on governance has also been examined along with other most relevant control variables by applying Auto regressive distributive lag model on time series dataset from 1984 to 2015 to estimate the results. When domestic human capital is operated with foreign advanced investment in the presence of conflict and misery, it cannot function properly generates governance problems in Pakistan. Here more and more expenditures are made human capital and poverty reduction but the governance has not been improved. 

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