Sectoral Linkages; Identifying the Key Growth Stimulating Sector of the Pakistan Economy
AbstractThis paper investigates growth linkages among agriculture, industry and different segments of the service sector with a view to identifying the main growth stimulating sector with the highest level of backward and forward linkages in the economy. Time series data is used for the period 1971 to 2002. We estimate growth linkages through OLS regression analysis, also the Granger causality test is used to determine the direction of causality between growth of the different sectors of the economy for Pakistan. Our results suggest that the industrial sector plays an important role in determining the overall growth rate of the economy. The industrial GDP growth rate and service sector GDP growth rate both cause the growth rate of agricultural GDP. This verifies the neoclassical arguments that the higher productivity techniques in industry, (particularly in manufacturing) tend to spill over to agriculture, so encouraging convergent tendencies in sectoral productivity levels.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 27210.
Date of creation: 01 Apr 2004
Date of revision:
Publication status: Published in Pakistan Business Review 1.6(2004): pp. 10-39
Growth; Sectoral Linkages; Pakistan;
Find related papers by JEL classification:
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
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