• DOI:10.20944/PREPRINTS201810.0082.V1
• Corpus ID: 158395362

Impact of Chinese Investment on Afghanistan Economic Growth

@inproceedings{Riazullah2018ImpactOC,
  title={Impact of Chinese Investment on Afghanistan Economic Growth},
  author={Shinwari Riazullah and Bai Yong-liang and Khan Baz},
  year={2018}
}

• Shinwari Riazullah, Bai Yong-liang, Khan Baz
• Published 4 October 2018
• Economics

The purpose of this is study to examine the impact of foreign direct investment (FDI) on GDP growth in Afghanistan with particular emphasis on Chinese FDI under the Belt and Road economic strategy. Belt and Road Initiative (BRI) assumed to be benefiting a poor country like Afghanistan; the newly developed ARDL-bound testing procedure is used for the period of (2006 – 2016). The result show that long run cointegration holds between economic growth and Chinese investment. Granger causality results indicate that there is bidirectional short and long run causality between economic growth and Chinese investment. These finding are supported by impulse response analysis and suggest the applicability of modernization theory to explain economic growth and Chinese investment relationship. The results also reveal that agriculture and services has a deteriorating impact on economic growth. Moreover the importance and feasibility of Wakhan corridor and link directly Afghanistan with China, also the expending of CPEC to Afghanistan for discovering easy route to middle Asia and Europe.