The impact of urbanization, infrastructure development and FDI on Pakistan’s economic growth

Abstract

The aim of this paper is to examine the impact of the strategic pillars of growth in Pakistan, which include foreign direct investment inflows, urbanization rate, youth dependency ratio, and investment in electricity. We used a bound test and error correction model of auto-regressive distributed lag (ARDL) over the period of 1999 to 2022. The findings state that these variables are negatively correlated with GDP growth rate, which means they have a significant but declining effect on the long-run economic growth of Pakistan. Based on the findings and policy recommendations, the nation can excel with the right planning on urbanization, youth development initiatives and proper foreign investments in local resources, uplifting employment, and industrial growth. It is recommended to the policymakers to analyze how and what policies to be implemented on these factors.