Abstract:

This study investigates the interplay between foreign investment, infrastructure development, and sustainable food security in Pakistan's agricultural sector, focusing on China's foreign direct investment (FDI). Employing annual data spanning 1985–2022, we utilize the Vector Autoregressive (VAR) and dynamic ARDL models to explore short- and long-term relationships among key variables, including foreign investment, infrastructure quality, governance, exchange rates, and trade dynamics. Unit root tests (ADF and Phillips–Perron) reveal that most variables become stationary after first differencing, confirming the suitability of our time-series approach. The ARDL Bounds Test indicates robust long-run relationships across models, with significant contributions from FDI and infrastructure development to food availability (FA). Long-run coefficients highlight that a 1% increase in China's FDI and infrastructure development improves food availability by 0.13%–0.21% and 0.16%–0.24%, respectively, underscoring their critical roles. Governance and exchange rate stability also demonstrate significant impacts, reinforcing their importance in shaping sustainable agricultural outcomes. Error correction terms (ECMt-1) across models confirm efficient adjustment mechanisms, with deviations from equilibrium correcting at 9%–27% annually. Parameter stability tests validate the robustness of the estimated models. Our findings provide evidence-based insights for policymakers, emphasizing the strategic significance of leveraging China's FDI and infrastructure projects to enhance food security in Pakistan's agricultural sector. This study highlights actionable pathways toward sustainable development goals through international cooperation and investment.