EMPIRICAL ANALYSIS OF THE DETERMINANTS OF ECONOMIC GROWTH IN PAKISTAN, 1971-2005

In this research paper the impacts of domestic investment, foreign direct investment, human capital and trade openness on economic growth of Pakistan have been analyzed. For this purpose secondary data have been taken from Federal Bureau of Statistics and Pakistan Economic Survey for the years ranging from 1971 to 2005. The method of Least Square was used for estimating the linear regression equation. The results showed that domestic investment, FDI, and trade openness have positive effect on economic growth and the coefficients are statistically significant. The human capital found significant with negative sign. It,s concluded that domestic investment, foreign direct investment, and liberalization of trade are key factors affecting the level of economic growth of Pakistan.