ARDL – Analysis of the Relationship among Exports, FDI, Current Account Deficit and Economic Growth in Pakistan

This paper empirically examines the relationship among exports, foreign direct investment, current account deficit and economic growth in Pakistan during the period 1975-2016.We adopted the autoregressive distributed lag (ARDL) approach to co-integration together with ECM techniques to trace the long-run as well as the short-run relationships. The results demonstrate the existence of a positive and significant relationship among exports, foreign direct investment and economic growth both in the long-run and short-run in Pakistan. While, results depict that current account deficit is negatively and significantly correlated to economic growth in the long-run and short-run. Furthermore, the Granger causality test reports the unidirectional causality running from exports to economic growth.