In developing countries, FDI is often seen as an important driver for economic growth. It effects the economic growth through transferring innovative technology, promoting domestic investment, enhancing human capital formations, reducing technology gap between local and foreign firms, boost domestic saving and promote financial system. This effect of FDI can only materialized if host countries have sufficient level of human capital, educations, strong financial system and greater level of absorptive capacity of innovative technologies. FDI in Pakistan now consider the major source of external...