The Impact of Electricity Crisis on FDI in Pakistan

The main intention of this paper is to check the impact of electricity crisis on foreign direct
investment inflow in Pakistan. Secondary data from world development indicator and energy book
with a sample of 13 years from 2001 to 2013 is taken. Unit root analysis for making data stationary
and OLS method are employed in Eviews to determine the impact of electricity crisis on FDI inflow
in Pakistan. Results indicate that there is a negative and significant relationship between electricity
crisis and FDI inflow in Pakistan. This paper also shows that due to electricity shortfall foreign
investors are discourage and ultimately there is decline in FDI inflow in Pakistan after 2005.