Role of Human Capital and Renewable Energy in Shaping Economic Growth of Pakistan

The aim of this study is to investigate the relationship between human capital, renewable energy, foreign direct investment and economic growth in Pakistan. For this purpose, secondary data ranging from 2000 to 2023 is used. Economic growth is used as the dependent variable, while human capital, physical capital, renewable energy, and foreign direct investment are used as independent variables. The Auto-Regressive Distributed Lag (ARDL) model technique is used for analysis. The results of this study indicate that, in the short run, physical capital positively impacts economic growth, while all other variables have a negative impact. However, renewable energy and foreign direct investment are found to be insignificant in influencing economic growth. In the long-run results, physical capital has a negative and insignificant impact, while human capital, renewable energy, and foreign direct investment positively impact economic growth. Policymakers and government officials should focus on improving education, particularly skill-based education, fostering public-private partnerships to enhance productivity and capital formation, providing incentives for renewable energy technologies, and implementing investor-friendly policies and tax incentives to attract foreign direct investment.