Globalization, FDI and Trade in Case Study of Pakistan: An Empirical Analysis

Sabeeha Naseer; Muhammad Shabir Jan

doi:doi:10.11648/j.jim.20211003.11

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Globalization, FDI and Trade in Case Study of Pakistan: An Empirical Analysis

Sabeeha Naseer, Muhammad Shabir Jan

Published in Journal of Investment and Management (Volume 10, Issue 3)

Received: 1 May 2021 Accepted: 8 July 2021 Published: 15 July 2021

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Abstract

Globalization is a complex phenomenon that has many national or international implications, as well as various impacts on the national economy and the world economy in general. The process of national economic globalization is clearly influenced by economic performance, foreign trade, financial development and its ability to attract foreign investment. Foreign capital has played a key role in the development of such a state in Pakistan. The current study used the time series data and the data range form 1981-2017. The variables are Globalization, foreign direct investment and trade. study applied ADF unit root test for stationary of these variables. First the unit root test applies at the level the variables are not stationary then apply at first difference so study applied ADF unit root test for stationary. The result shows that all variables are stationary at first difference. However, all variables are not stationary at level. the application of Johansen co-integration test appropriate applied for the purpose of association between variables. Finally, the study applied Vector Error Correction Model (VECM) for the purpose of long run analysis of the study. Johansen co-integration test concluded that globalization have positive impact on FDI and Trade. (VECM) model shows that the Globalization, FDI and Trade have long run relationship.

Published in	Journal of Investment and Management (Volume 10, Issue 3)
DOI	10.11648/j.jim.20211003.11
Page(s)	38-42
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Globalization, Foreign Direct Investment, Trade, Johansen Co-integration, VECM

References

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[2]	Al-Shawaf, A. M. K. & Almsafir, M. K. (2016). Economic globalization: role of inward and outward FDI with economic growth-Evidence from Malaysia. Journal of Business and Retail Management Research, Vol. 10 Issue 2, pp. 64-74.
[3]	Dima, S. (2016). Globalisation, trade openness and foreign direct investment in Romania. Studia Universitatis Vasile Goldiş, Arad-Seria Ştiinţe Economice, 26 (4), 41-53.
[4]	Meraj, M. (2013). Impact of globalization and trade openness on economic growth in Bangladesh. Ritsumeikan Journal of Asia Pacific Studies, 32, 40-50.
[5]	Kumar, N. (2002). Globalization and the quality of foreign direct investment. Oxford UnivPr.
[6]	Liargovas, P. G., & Skandalis, K. S. (2012). Foreign direct investment and trade openness: The case of developing economies. Social indicators research, 106 (2), 323-331.
[7]	Custorella, F. (2017). The impact of globalization on FDI: An empirical analysis of the FDI determinants in China.
[8]	Kornecki, L. & Rhoades, D. (2007). How FDI facilitates the globalisation process and stimulates economic growth in CEE. Journal of International Business Reserch, Vol. 6, No. 1, pp. 113-126.
[9]	Heimann, B. (2003). Tax incentives for Foreign Direct Investment in the Tax Systems of Poland, the Netherlands, Belgium and France. Available at: http://www.iwim.unibremen.de/publikationen/pdf/b074.pdf Accessed 30 June 2016.
[10]	Kahai, S. K. &Simmons, W. (2005). The impact of Globalization on income inequity. Global Business and Economics Review, Vol. 7, No. 1, pp. 1-15.
[11]	Adams, S. (2008). Globalization and income inequality: Implications for intellectual propertyrights. Journal of Policy Modeling, 30 (5), pp. 725-735.
[12]	Méon, P. G. and Sekkat, K. (2007). Revisiting the relationship between governance and foreign direct investment. Brussels Economic Review, 50 (1), pp. 41-61.
[13]	Fadhil, M. A. and Almsafir, M. K. (2015). The Role of FDI Inflows in Economic Growth in Malaysia (Time Series: 1975-2010). Procedia Economics and Finance, 23, pp. 15581566.
[14]	Farshid, P. Ali, S. and Gholamhosein, S. (2009). The impact of foreign direct investment and trade on economic growth-Taking China, Korea, Malaysia, Philippines & Thailand for example. China-USA Business Review, 8 (12), pp. 37-43.
[15]	Mutascu, M. and Fleischer, A.-M. (2011). Economic Growth and Globalization in Romania. World Applied Sciences Journal, 12 (10), pp. 1691-1697.
[16]	Neagu, O. (2014). How much does globalisation affect the income inequality in Romania?. Studia Universitatis “Vasile Goldis” Arad, Economics Series, Vol. 24, Issue 4, pp. 76-83.

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APA Style

Sabeeha Naseer, Muhammad Shabir Jan. (2021). Globalization, FDI and Trade in Case Study of Pakistan: An Empirical Analysis. Journal of Investment and Management, 10(3), 38-42. https://doi.org/10.11648/j.jim.20211003.11

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ACS Style

Sabeeha Naseer; Muhammad Shabir Jan. Globalization, FDI and Trade in Case Study of Pakistan: An Empirical Analysis. J. Invest. Manag. 2021, 10(3), 38-42. doi: 10.11648/j.jim.20211003.11

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AMA Style

Sabeeha Naseer, Muhammad Shabir Jan. Globalization, FDI and Trade in Case Study of Pakistan: An Empirical Analysis. J Invest Manag. 2021;10(3):38-42. doi: 10.11648/j.jim.20211003.11

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@article{10.11648/j.jim.20211003.11,
  author = {Sabeeha Naseer and Muhammad Shabir Jan},
  title = {Globalization, FDI and Trade in Case Study of Pakistan: An Empirical Analysis},
  journal = {Journal of Investment and Management},
  volume = {10},
  number = {3},
  pages = {38-42},
  doi = {10.11648/j.jim.20211003.11},
  url = {https://doi.org/10.11648/j.jim.20211003.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jim.20211003.11},
  abstract = {Globalization is a complex phenomenon that has many national or international implications, as well as various impacts on the national economy and the world economy in general. The process of national economic globalization is clearly influenced by economic performance, foreign trade, financial development and its ability to attract foreign investment. Foreign capital has played a key role in the development of such a state in Pakistan. The current study used the time series data and the data range form 1981-2017. The variables are Globalization, foreign direct investment and trade. study applied ADF unit root test for stationary of these variables. First the unit root test applies at the level the variables are not stationary then apply at first difference so study applied ADF unit root test for stationary. The result shows that all variables are stationary at first difference. However, all variables are not stationary at level. the application of Johansen co-integration test appropriate applied for the purpose of association between variables. Finally, the study applied Vector Error Correction Model (VECM) for the purpose of long run analysis of the study. Johansen co-integration test concluded that globalization have positive impact on FDI and Trade. (VECM) model shows that the Globalization, FDI and Trade have long run relationship.},
 year = {2021}
}

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TY - JOUR
T1 - Globalization, FDI and Trade in Case Study of Pakistan: An Empirical Analysis
AU - Sabeeha Naseer
AU - Muhammad Shabir Jan
Y1 - 2021/07/15
PY - 2021
N1 - https://doi.org/10.11648/j.jim.20211003.11
DO - 10.11648/j.jim.20211003.11
T2 - Journal of Investment and Management
JF - Journal of Investment and Management
JO - Journal of Investment and Management
SP - 38
EP - 42
PB - Science Publishing Group
SN - 2328-7721
UR - https://doi.org/10.11648/j.jim.20211003.11
AB - Globalization is a complex phenomenon that has many national or international implications, as well as various impacts on the national economy and the world economy in general. The process of national economic globalization is clearly influenced by economic performance, foreign trade, financial development and its ability to attract foreign investment. Foreign capital has played a key role in the development of such a state in Pakistan. The current study used the time series data and the data range form 1981-2017. The variables are Globalization, foreign direct investment and trade. study applied ADF unit root test for stationary of these variables. First the unit root test applies at the level the variables are not stationary then apply at first difference so study applied ADF unit root test for stationary. The result shows that all variables are stationary at first difference. However, all variables are not stationary at level. the application of Johansen co-integration test appropriate applied for the purpose of association between variables. Finally, the study applied Vector Error Correction Model (VECM) for the purpose of long run analysis of the study. Johansen co-integration test concluded that globalization have positive impact on FDI and Trade. (VECM) model shows that the Globalization, FDI and Trade have long run relationship.
VL - 10
IS - 3
ER -

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Author Information

Sabeeha Naseer

Department of Economics, Bacha Khan University Charsadda, Charsadda, Pakistan
Muhammad Shabir Jan

Department of Economics, Bacha Khan University Charsadda, Charsadda, Pakistan

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APA Style

Sabeeha Naseer, Muhammad Shabir Jan. (2021). Globalization, FDI and Trade in Case Study of Pakistan: An Empirical Analysis. Journal of Investment and Management, 10(3), 38-42. https://doi.org/10.11648/j.jim.20211003.11

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ACS Style

Sabeeha Naseer; Muhammad Shabir Jan. Globalization, FDI and Trade in Case Study of Pakistan: An Empirical Analysis. J. Invest. Manag. 2021, 10(3), 38-42. doi: 10.11648/j.jim.20211003.11

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AMA Style

Sabeeha Naseer, Muhammad Shabir Jan. Globalization, FDI and Trade in Case Study of Pakistan: An Empirical Analysis. J Invest Manag. 2021;10(3):38-42. doi: 10.11648/j.jim.20211003.11

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@article{10.11648/j.jim.20211003.11,
  author = {Sabeeha Naseer and Muhammad Shabir Jan},
  title = {Globalization, FDI and Trade in Case Study of Pakistan: An Empirical Analysis},
  journal = {Journal of Investment and Management},
  volume = {10},
  number = {3},
  pages = {38-42},
  doi = {10.11648/j.jim.20211003.11},
  url = {https://doi.org/10.11648/j.jim.20211003.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jim.20211003.11},
  abstract = {Globalization is a complex phenomenon that has many national or international implications, as well as various impacts on the national economy and the world economy in general. The process of national economic globalization is clearly influenced by economic performance, foreign trade, financial development and its ability to attract foreign investment. Foreign capital has played a key role in the development of such a state in Pakistan. The current study used the time series data and the data range form 1981-2017. The variables are Globalization, foreign direct investment and trade. study applied ADF unit root test for stationary of these variables. First the unit root test applies at the level the variables are not stationary then apply at first difference so study applied ADF unit root test for stationary. The result shows that all variables are stationary at first difference. However, all variables are not stationary at level. the application of Johansen co-integration test appropriate applied for the purpose of association between variables. Finally, the study applied Vector Error Correction Model (VECM) for the purpose of long run analysis of the study. Johansen co-integration test concluded that globalization have positive impact on FDI and Trade. (VECM) model shows that the Globalization, FDI and Trade have long run relationship.},
 year = {2021}
}

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