The impact of foreign direct investment on trade in Pakistan: the moderating role of terrorism

Shah, SH; Hasnat, H; Sarath, D

The impact of foreign direct investment on trade in Pakistan: the moderating role of terrorism

Shah, SH Hasnat, H Sarath, D

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Publisher:: Emerald
Publication Type:: Journal Article
Citation:: Journal of Economic Studies, 2020, 47, (5), pp. 1137-1154
Issue Date:: 2020-04-28

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Field	Value	Language
dc.contributor.author	Shah, SH
dc.contributor.author	Hasnat, H
dc.contributor.author	Sarath, D
dc.date.accessioned	2021-06-22T06:46:59Z
dc.date.available	2021-06-22T06:46:59Z
dc.date.issued	2020-04-28
dc.identifier.citation	Journal of Economic Studies, 2020, 47, (5), pp. 1137-1154
dc.identifier.issn	0144-3585
dc.identifier.uri	http://hdl.handle.net/10453/149715
dc.description.abstract	<jats:sec><jats:title content-type="abstract-subheading">Purpose</jats:title><jats:p>Pakistan suffered with the menace of terrorism for long and become a front line state in the “War on Terror”. Terrorism shattered Pakistan economy and rendered her external sector vulnerable to instability and uncertainties.</jats:p></jats:sec><jats:sec><jats:title content-type="abstract-subheading">Design/methodology/approach</jats:title><jats:p>Therefore, using system generalized method of moment (GMM), this paper investigates the impact of foreign direct investment (FDI) on exports, imports and trade deficit in the face of unabated terrorism in Pakistan.</jats:p></jats:sec><jats:sec><jats:title content-type="abstract-subheading">Findings</jats:title><jats:p>The findings of the paper suggest that as terrorism in Pakistan increased, FDI contribution to Pakistan exports decreased while FDI contribution to Pakistan imports significantly increased. Terrorism also disrupted the chain of local production and increased Pakistan reliance on imports. Thus terrorism widened Pakistan trade deficit of Pakistan and expose Pakistan to external imbalances.</jats:p></jats:sec><jats:sec><jats:title content-type="abstract-subheading">Originality/value</jats:title><jats:p>Despite rise in organized acts of terrorism and its adverse impact on various departments of economy, hardly any study bothers to check its impact on trade and investment nexus. This is the first study of its nature that looks deep down to understand how terrorism affects the relation of major economic variables.</jats:p></jats:sec>
dc.language	en
dc.publisher	Emerald
dc.relation.ispartof	Journal of Economic Studies
dc.relation.isbasedon	10.1108/jes-06-2019-0263
dc.rights	info:eu-repo/semantics/closedAccess
dc.subject	14 Economics
dc.subject.classification	Economics
dc.title	The impact of foreign direct investment on trade in Pakistan: the moderating role of terrorism
dc.type	Journal Article
utslib.citation.volume	47
utslib.for	1402 Applied Economics
utslib.for	14 Economics
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
utslib.copyright.status	closed_access	*
dc.date.updated	2021-06-22T06:46:58Z
pubs.issue	5
pubs.publication-status	Published
pubs.volume	47
utslib.citation.issue	5

Abstract:

PurposePakistan suffered with the menace of terrorism for long and become a front line state in the “War on Terror”. Terrorism shattered Pakistan economy and rendered her external sector vulnerable to instability and uncertainties.Design/methodology/approachTherefore, using system generalized method of moment (GMM), this paper investigates the impact of foreign direct investment (FDI) on exports, imports and trade deficit in the face of unabated terrorism in Pakistan.FindingsThe findings of the paper suggest that as terrorism in Pakistan increased, FDI contribution to Pakistan exports decreased while FDI contribution to Pakistan imports significantly increased. Terrorism also disrupted the chain of local production and increased Pakistan reliance on imports. Thus terrorism widened Pakistan trade deficit of Pakistan and expose Pakistan to external imbalances.Originality/valueDespite rise in organized acts of terrorism and its adverse impact on various departments of economy, hardly any study bothers to check its impact on trade and investment nexus. This is the first study of its nature that looks deep down to understand how terrorism affects the relation of major economic variables.

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http://hdl.handle.net/10453/149715