Effect of domestic and foreign private investment on economic growth of Pakistan

Shabbir, Malik Shahzad; Bashir, Misbah; Abbasi, Hina Munir; Yahya, Ghulam; Abbasi, Bilal Ahmed

doi:10.1080/19186444.2020.1858676

Cited by 68 publications

(31 citation statements)

References 40 publications

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“…However, until (i) an investor sentiment index following the guidelines of Baker and Wurgler (2006) is constructed (as suggested by Fong and Toh (2014)), (ii) a comprehensive examination of the behaviour of dominant investor type in speculative stocks (or legs) is carried out (Ali and € Ulk€ u ( 2020)), and (iii) the role of foreign investment on sentiments, stock prices and mispricing is examined (e.g. Shabbir and Muhammad (2019) and Shabbir et al (2020)) for the Pakistani market, we leave this as a conjecture.…”

Section: Discussionmentioning

confidence: 99%

Predictability of extreme daily returns and Preference for lottery-like stocks in an emerging market

Khurram

Ali

Jiang

et al. 2021

Economic Research-Ekonomska Istraživanja

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This study investigates the presence of the MAX effectstocks with extreme daily (positive) return in the current month perform poorly in the following monthin the Pakistani stock market (PSX). Similar to the US, Europe, and Chinese stock markets, we find a negative effect of MAX on risk-adjusted returns. Furthermore, we find that the MAX effect persists even if we extend the holding period to three-and six-month. Our results are robust for both portfolio-level and firm-level cross-sectional analyses and across subperiods, size groups, and alternative factor definitions and models. Interestingly, contrary to findings reported elsewhere, we find that the MAX effect in Pakistan exists only when the overall economy is in an expansion state. A battery of tests suggests that triviality in MAX effect during economic contraction in Pakistan is driven by the more negative subsequent performance of low-MAX stocks (short-leg), whereas, in other markets, more negative subsequent performance of high-MAX stocks (long-leg) is evident during economic downturns. Our potential explanation is partially supported by the theoretical model of Palfrey & Wang, who find that demand for speculative stocks (i.e. lottery-like stocks) is higher during 'good' economic news (expansion) than 'bad' economic news (contraction).

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Section: Discussionmentioning

confidence: 99%

Predictability of extreme daily returns and Preference for lottery-like stocks in an emerging market

Khurram

Ali

Jiang

et al. 2021

Economic Research-Ekonomska Istraživanja

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“…Domestic savings could be reduced by foreign capital hence it hurts economic growth (Griffin, 2009). Whereas, a positive impact of foreign capital inflows on economic growth occurs for Pakistan from 1975 to 2004 and foreign capital is an important source of modification of the structure of the economy (T. Shabbir & Mahmood, 1992;Mohey-ud-din, 2007). As the credit market matures with less regulation; its impact can be observed through an increase in output and welfare (Clemens & Heinemann, 2010).…”

Section: Review Of Literaturementioning

confidence: 99%

Nexus between economic growth and foreign private investment: Evidence from Pakistan economy

Sadiq¹,

Usman

Zamir

et al. 2021

Cogent Economics & Finance

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This study examines the impact of economic growth along with taxes, technology, trade openness and exchange rate on the sustainability of foreign private investment (FPI) in Pakistan. This study uses random effects and generalized least squares estimators and contains data set starting from 1996 to 2017. The results indicate that the Pakistan economy has vastly positive influenced regarding the location and choice of emerging and developed countries' investment in the domestic market. Furthermore, emerging and developed economies investment increases the contribution among domestic firms to the national economy. The results, which are consistent across models, indicate that Pakistan's economy is more likely to receive FPI from emerging and developed economies, but the relative intensity of local government efforts, regardless of economic size. Moreover, an increase in likelihood will generate FPI from developed countries.

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“…Scholars critical of aid dependency models have argued that policies introduced through structural adjustment programmes impede the development path. Shabbir et al (1992) conducted an analysis of global scale in relation to the worldwide International Monetary Fund (IMF) programmes and found that structural adjustment conditionalities imposed by the IMF negatively affect a country's economic growth. In fact, higher levels of bilateral and commercial debts hinder the economic expansion of poorer countries, though physical aspects of life might remain unaffected for a short period of time.…”

Section: Fdi and The Two-level Analytical Frameworkmentioning

confidence: 99%

China’s Debt Trap in Pakistan? A Case Study of the CPEC Project

Shaikh

Chen

2021

South Asia Research

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Existing literature on China–Pakistan trade relations mainly deals with potential opportunities for Chinese investment, while no study has so far specifically analysed Chinese investment in light of the China–Pakistan Economic Corridor (CPEC) project by taking into account how Pakistan’s domestic factors shape foreign trade relations. This article argues that the weak economic indicators of Pakistan reveal a possibility of defaulting on debt repayments, as Chinese loans have relatively high-interest rates. Through a two-level analytical framework, this article demonstrates that, despite concerns about Chinese debt traps at the international level, the CPEC project is still largely intact due to strong domestic support of the Pakistani establishment. Further, the geostrategic importance of Pakistan for China is higher than merely trade relations. It is thus also not in the interest of China to see its investments in Pakistan become a debt trap, though the institutional arrangements in Pakistan are prone to mounting debts.

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Effect of domestic and foreign private investment on economic growth of Pakistan

Cited by 68 publications

References 40 publications

Predictability of extreme daily returns and Preference for lottery-like stocks in an emerging market

Predictability of extreme daily returns and Preference for lottery-like stocks in an emerging market

Nexus between economic growth and foreign private investment: Evidence from Pakistan economy

China’s Debt Trap in Pakistan? A Case Study of the CPEC Project

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