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Trade Liberalisation and Industrial Growth in Pakistan: A Cointegration Analysis

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  • Dilip Dutta

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  • Nasiruddin Ahmed

Abstract

Using the framework of an endogenous growth model, this paper empirically analyses the relationship between trade policies and industrial growth in Pakistan during the period 1973 - 1995. The cointegration and error correction modelling approaches have been applied. The empirical results suggest that there exists a unique long-run relationship among the aggregate growth function of industrial value added and its major determinants of the real capital stock, the labour force, real exports, the import tariff collection rate and the secondary school enrolment ratio. The short -term dynamic behaviour of Pakistan's growth function of industrial value added has been investigated by estimating an error correction model in which the error correction term has been found to be correctly signed and statistically significant.

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File URL: https://crawford.anu.edu.au/acde/asarc/pdf/papers/2001/WP2001_01.pdf
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Bibliographic Info

Paper provided by The Australian National University, Australia South Asia Research Centre in its series ASARC Working Papers with number 2001-01.

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Length: 30
Date of creation: 2001
Date of revision:
Handle: RePEc:pas:asarcc:2001-01

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Cited by:
  1. Irfan, Mohammad & Muhammad Yasin, Hafiz, 2009. "Socio-Economic Challenges Faced by Pakistan," MPRA Paper 40570, University Library of Munich, Germany.
  2. Faiza Umer & Shaista Alam, 2013. "Effect of Openness to Trade and FDI on Industrial Sector Growth: A Case Study for Pakistan," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 16(48), pages 179-198, June.
  3. Muhammad, Shahbaz, 2012. "Does Trade Openness Affect Long Run Growth? Cointegration, Causality and Forecast Error Variance Decomposition Tests for Pakistan," MPRA Paper 37391, University Library of Munich, Germany, revised 10 Mar 2012.
  4. Maryam Asghari, 2012. "Environmental Kuznets Curve and Growth Source in Iran," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 59(5), pages 609-623, December.
  5. Chaudhry, Azam & Bukhari, Syed Kalim Hyder, 2013. "A structural VAR analysis of the impact of macroeconomic shocks on Pakistan's textile exports," Economic Modelling, Elsevier, vol. 32(C), pages 302-315.
  6. Chandran, V.G.R. & Munusamy, 2009. "Trade openness and manufacturing growth in Malaysia," Journal of Policy Modeling, Elsevier, vol. 31(5), pages 637-647, September.

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