Empirical analysis of portfolio investments in Pakistan

摘要

Foreign private investment could play a vital role in the economic growth of developing countries, provided that governments play an active role in attracting and accelerating the benefits of foreign investment. In this paper, I have used the data of some variables affecting capital & financial account from 1986 to 2006 to generate some results. I have emphasized the Granger causality test and impulse response functions to analyze the dynamic influence of Foreign Portfolio Investment to the capital and financial accounts, as well as the GDP of Pakistan. The results suggest that foreign portfolio investment has a negative effect on current account balance and a positive effect on capital and financial account.