Pakistan Institute of Development Economics



The Nexus of Foreign Direct Investment, Economic Growth andEnvironment in Pakistan

This paper estimate the impact of sectoral FDI on economicgrowth and carbon dioxide emissions in Pakistan. To this end, it usestime series secondary data from 1972 to 2011 and applies Auto RegressiveDistributed Lag (ARDL) models. The results showed that FDI inflows inmanufacturing, transport, storage and communication sectors and energyconsumption have positive effect on the GDP growth of Pakistan. Besides,FDI inflow in manufacturing, transport, storage and communication sectorand population density are responsible for the CO2 emissions inPakistan. The results also validate Environmental Kuznet Curves in bothlong and short run. JEL Classification: E2, O4, Q5 Keywords: SectoralFDI, CO2 emissions, Environmental Kuznet Curves, Gross Domestic ProductGrowth

Syed Sundus Raza,

Anwar Hussain