Can FDI and Tax on Producer Interrupt the Industrial Development: An ARDL Based Evidence from Pakistan

Foreign Direct Investment (FDI) and Taxes on Producer (TP) are crucial to locate the industrial development of particularly the developing economies like Pakistan. This study is initiated to locate the joint effect of FDI and TP on producer on the industry value added. For the analytical purpose, the data was collected from 1980 to 2023. The regression technique of Autoregressive Distributed Lag (ARDL) is used to meet the objectives of the study. The results confirm long run relationship with the nonlinear relationship of FDI×TP and industrial value added. For the government, it is suggested to have a catharsis before announcing the taxation policy that is good for the industrial sector.