Impact of foreign direct investment on poverty reduction in Afghanistan

This empirical and analytical study for the period of 2003-2018 estimates and considers the impact of foreign direct investment on poverty reduction of Afghanistan by applying the VAR model (1980). The model is run by having the dependent (pre-dicted) variable of economic growth and independent (predictors) variable of foreign direct investment and employment. Finally, this empirical result shows that foreign direct investment does not have any significant effects on the poverty reduction of Afghanistan for the 15 years term from 2003-2018. Although the impulse response shows that if GDP increases the Employment will be also increasing for the first coming year but still, we cannot conclude any comment because of insignificance result. Because of existence of internal war in Afghanistan there are no more data available so taking 15 years observation is compulsory order so as a result the VAR model cannot shows the completed result. Keyword: Poverty reduction, FDI, VAR model, Unemployment, GDP