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The Impact of Exports Diversification on Economic Growth: Evidence from Pakistan

Author

Listed:
  • Sonia Liaqat

    (COMSATS Institute of Information Technology Vehari, Pakistan)

  • Muhammad Irfan Chani

    (COMSATS Institute of Information Technology Vehari -Pakistan)

Abstract

The paper explores the impact of export diversification on the economic growth in Pakistan. Augmented Dickey Fuller unit root test Bound F test results, estimated long run coefficients and ARDL short run Error Correction Model (ECM-ARDL) results applied for the empirical estimation of the study. Gross domestic product per capita, export diversification, is stationary at first difference and real effective exchange rate and population density are stationary at level. Export, real effective exchange rate and population density positively effect on economic growth. Human capital formation is negatively affected on economic growth. The bound testing approach to Co integration is used during 1980 to 2015. This test suggests that in long run series of interest are linked together. In the mid of year equilibrium is fairly fast and restored. Government should increase discoveries because about foreign demand would lead to imitation and therefore increased local production for exports and higher growth. Government should therefore intervene by creating the right incentives for investment.

Suggested Citation

  • Sonia Liaqat & Muhammad Irfan Chani, 2018. "The Impact of Exports Diversification on Economic Growth: Evidence from Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 7(4), pages 156-168, December.
    • Handle: RePEc:rfh:bbejor:v:7:y:2018:i:4:p:156-168
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    References listed on IDEAS

    as
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    2. Muhammad Wasif Siddiqi & Amjad Ali & Muhammad Irfan Chani, 2014. "Import Demand, Economic Development and Trade Liberalization in Pakistan: An Empirical Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 3(2), pages 131-141, June.
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    6. Awudu Abdulai & Philippe Jacquet, 2002. "Exports and Economic Growth: Cointegration and Causality Evidence for Côte d’Ivoire," African Development Review, African Development Bank, vol. 14(1), pages 1-17.
    7. Xuefeng, Qian & Yaşar, Mahmut, 2016. "Export Market Diversification and Firm Productivity: Evidence from a Large Developing Country," World Development, Elsevier, vol. 82(C), pages 28-47.
    8. Amjad Ali & Muhammad Irfan Chani, 2013. "Disaggregated Import Demand Function: A Case Study of Pakistan," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 1(1), pages 1-14, January.
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    Keywords

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    JEL classification:

    • F1 - International Economics - - Trade
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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