Purpose - The purpose of the study is to investigate the relationship between international financial integration (IFI) index and democracy (DEM) in Pakistan by using long-time series data from 1975 to 2013. Design/methodology/approach - The IFI index is constructed by principal component analysis. IFI consists of foreign direct investment (FDI), remittances (REM) and external debt (ED), whereas the Polity IV index is used for DEM. Johansen and the autoregressive distributed lag method for cointegration methods are used to find a long run relationship. Dynamic ordinary least square (DOLS), fully modified ordinary least square (FMOLS) and canonical regression (CR) have been used to find the nature of the relationship. Rolling window analysis has been done to find the year wise coefficients. Findings - DOLS, FMOLS, canonical regression CR and cointegration results suggest a significant negative long-run relationship between IFI and DEM in Pakistan. Rolling windows analysis highlights that DEM has improved IFI in Pakistan from 2008 to 2013. Originality/value - This study constructs an index for financial integration using principle component analysis on capital inflows, i.e. FDI, REM, ED, to explore the impact of DEM on IFI in Pakistan from 1975 to 2013. This study investigates for the first time ever the relationship between IFI index and DEM in Pakistan.

中文翻译：

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巴基斯坦的民主和国际金融一体化

目的 - 本研究的目的是通过使用 1975 年至 2013 年的长期序列数据调查巴基斯坦国际金融一体化 (IFI) 指数与民主 (DEM) 之间的关系。 设计/方法/途径 - 构建 IFI 指数通过主成分分析。IFI 包括外国直接投资 (FDI)、汇款 (REM) 和外债 (ED)，而 Polity IV 指数用于 DEM。Johansen 和协整方法的自回归分布滞后方法用于寻找长期关系。动态普通最小二乘法 (DOLS)、完全修正普通最小二乘法 (FMOLS) 和规范回归 (CR) 已被用于发现关系的性质。已经进行了滚动窗口分析以找到逐年系数。结果 - DOLS、FMOLS、典型回归 CR 和协整结果表明巴基斯坦的 IFI 和 DEM 之间存在显着的负长期关系。滚动窗口分析突出显示，DEM 在 2008 年至 2013 年间改善了巴基斯坦的 IFI。 原创性/价值 - 本研究使用对资本流入（即 FDI、REM、ED）的主成分分析构建金融一体化指数，以探讨 DEM 对金融一体化的影响1975 年至 2013 年巴基斯坦的 IFI。本研究首次调查了巴基斯坦 IFI 指数与 DEM 之间的关系。