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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.

Suggested Citation

  • Dilip Dutta & Nasiruddin Ahmed, 2001. "Trade Liberalisation and Industrial Growth in Pakistan: A Cointegration Analysis," ASARC Working Papers 2001-01, The Australian National University, Australia South Asia Research Centre.
  • Handle: RePEc:pas:asarcc:2001-01
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    Cited by:

    1. Qaisar Abbas & James Foreman-Peck, 2008. "Human Capital and Economic Growth: Pakistan, 1960-2003," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 13(1), pages 1-27, Jan-Jun.
    2. Shahbaz, Muhammad, 2012. "Does trade openness affect long run growth? Cointegration, causality and forecast error variance decomposition tests for Pakistan," Economic Modelling, Elsevier, vol. 29(6), pages 2325-2339.
    3. 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.
    4. repec:eee:ecanpo:v:54:y:2017:i:c:p:15-25 is not listed on IDEAS
    5. Qazi Hye & Wee-Yeap Lau & Marie-Aimée Tourres, 2014. "Does economic liberalization promote economic growth in Pakistan? An empirical analysis," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(4), pages 2097-2119, July.
    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.
    7. Sulman Hafeez, Siddiqui & Hassan Mujtaba Nawaz, Saleem, 2008. "Services-led Growth and Industrial Policy: Lessons for Pakistan," MPRA Paper 75647, University Library of Munich, Germany.
    8. Naeimeh Hozouri, 2017. "The Effect of Trade Liberalization On Economic Growth: Selected MENA Countries," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(1), pages 88-95, January.
    9. Irfan, Mohammad & Muhammad Yasin, Hafiz, 2009. "Socio-Economic Challenges Faced by Pakistan," MPRA Paper 40570, University Library of Munich, Germany.
    10. 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.
    11. Guglielmo Maria Caporale & Rodrigo Costamagna & Gustavo Rossini, 2016. "Competitive Devaluations in Commodity-Based Economies: Colombia and the Pacific Alliance Group," CESifo Working Paper Series 5907, CESifo Group Munich.
    12. Qazi Hye, 2012. "Long term effect of trade openness on economic growth in case of Pakistan," Quality & Quantity: International Journal of Methodology, Springer, vol. 46(4), pages 1137-1149, June.
    13. Giscard Assoumou Ella, 2013. "Impact of international income, prices and monetary shocks on real exchange rate in eight African economies: An empirical study," The Empirical Econometrics and Quantitative Economics Letters, Faculty of Economics, Chiang Mai University, vol. 2(3), pages 41-54, September.
    14. 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.

    More about this item

    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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