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Trade liberalization and industrial growth in Pakistan: a cointegration analysis

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  • Dilip Dutta
  • Nasiruddin Ahmed

Abstract

Using the framework of an endogenous growth model, this study 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.

Suggested Citation

  • Dilip Dutta & Nasiruddin Ahmed, 2004. "Trade liberalization and industrial growth in Pakistan: a cointegration analysis," Applied Economics, Taylor & Francis Journals, vol. 36(13), pages 1421-1429.
    • Handle: RePEc:taf:applec:v:36:y:2004:i:13:p:1421-1429
    DOI: 10.1080/0003684042000206951
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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F10 - International Economics - - Trade - - - General
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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