Impact of Foreign Direct Investment in Pakistan

Investment is capital formation or creation of resources to be used in production. Investment can be done in any form, either by physical capital building or by nonprofit human acquisition. Primarily, we can define investment as an asset or property right held, in any country other than the home country of the investor, for conserving the wealth or earning as income, is termed as foreign direct investment (FDI) (Steven N. Durlauf and Lawrence E. Blume (2008)). The purpose of this paper is to explain the factors that plunged the economy of Pakistan in past years. Our aim is to show a clear view of foreign direct investment in Pakistan,- as it is the major influential factor in any economy-, by using principal component analysis, in which Score plot shows a clear picture about the behavior of FDI in last years. It is a general overview of where had we been standing and where we are now and perhaps what will happen in near future.