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AN EMPIRICAL ANALYSIS OF THE FINANCIAL REVOLVING DOOR HYPOTHESIS AN EVIDENCE FROM PAKISTAN

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17 Pages : 180-192

http://dx.doi.org/10.31703/gssr.2023(VIII-I).17      10.31703/gssr.2023(VIII-I).17      Published : Mar 2023

An Empirical Analysis of the Financial Revolving Door Hypothesis: An Evidence from Pakistan

Abstract

    A simultaneous equation technique was used to investigate the relationship between capital flight (CF) and external debt (the financial revolving door theory) in Pakistan. Time series data from 1984 to 2020 are used to determine the algorithm. Using an appropriate approach, the research contributes to the measurement of capital flight from Pakistan. Three Stages Least Square is used in this study to examine institutions' relationships with capital market literature. (3SLS method). The study found that poor governance, inflation, external debt, and interest rate differentials caused CF and capital outflow by creating an unstable and unfavourable environment for savings and investment. CF causes external borrowings and world capital market borrowing. Capital retention is crucial due to this and ecological development policies. The Granger Causality Test validates Pakistan's Financial Revolving Door Hypothesis. The study concludes with policy suggestions.

    (1) Faizan Ali
    Lecturer, Department of Higher Education, Government of Punjab, Pakistan.
    (2) Faran Ali
    Senior Officer, University of Management & Technology, Lahore, Punjab, Pakistan.
    (3) Asima Ihsan
    Research Analyst, Punjab Tourism for Economic Growth Project, Lahore, Punjab, Pakistan.
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Cite this article

APA

    APA : Ali, F., Ali, F., & Ihsan, A. (2023). An Empirical Analysis of the Financial Revolving Door Hypothesis: An Evidence from Pakistan. Global Social Sciences Review, VIII(I), 180-192. https://doi.org/10.31703/gssr.2023(VIII-I).17

CHICAGO

    CHICAGO : Ali, Faizan, Faran Ali, and Asima Ihsan. 2023. "An Empirical Analysis of the Financial Revolving Door Hypothesis: An Evidence from Pakistan." Global Social Sciences Review, VIII (I): 180-192 doi: 10.31703/gssr.2023(VIII-I).17

HARVARD

    HARVARD : ALI, F., ALI, F. & IHSAN, A. 2023. An Empirical Analysis of the Financial Revolving Door Hypothesis: An Evidence from Pakistan. Global Social Sciences Review, VIII, 180-192.

MHRA

    MHRA : Ali, Faizan, Faran Ali, and Asima Ihsan. 2023. "An Empirical Analysis of the Financial Revolving Door Hypothesis: An Evidence from Pakistan." Global Social Sciences Review, VIII: 180-192

MLA

    MLA : Ali, Faizan, Faran Ali, and Asima Ihsan. "An Empirical Analysis of the Financial Revolving Door Hypothesis: An Evidence from Pakistan." Global Social Sciences Review, VIII.I (2023): 180-192 Print.

OXFORD

    OXFORD : Ali, Faizan, Ali, Faran, and Ihsan, Asima (2023), "An Empirical Analysis of the Financial Revolving Door Hypothesis: An Evidence from Pakistan", Global Social Sciences Review, VIII (I), 180-192

TURABIAN

    TURABIAN : Ali, Faizan, Faran Ali, and Asima Ihsan. "An Empirical Analysis of the Financial Revolving Door Hypothesis: An Evidence from Pakistan." Global Social Sciences Review VIII, no. I (2023): 180-192. https://doi.org/10.31703/gssr.2023(VIII-I).17