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Physical infrastructure and economic development in Pakistan

Author

Listed:
  • Jan, Sajjad Ahmad
  • Chani, Muhammad Irfan
  • Pervaiz, Zahid
  • Chaudhary, Amatul R.

Abstract

This paper aims to investigate the relationship between physical infrastructure and economic development of Pakistan. A composite index of physical infrastructure has been constructed through Principal Component Analysis. This has been done by taking into account three different dimensions of infrastructure i.e. transportation infrastructure, energy infrastructure, and telecommunication infrastructure. Johansen Co-integration Technique has been applied to confirm the existence of co-integration among the variables of our interest. The empirical analysis shows that co-integration exists among the variables of economic development, employed labour force, gross private fixed capital formation and physical infrastructure. The variables of employed labour force, gross private fixed capital formation and physical infrastructure have statistically significant and positive effect on economic development of Pakistan.

Suggested Citation

  • Jan, Sajjad Ahmad & Chani, Muhammad Irfan & Pervaiz, Zahid & Chaudhary, Amatul R., 2012. "Physical infrastructure and economic development in Pakistan," MPRA Paper 37785, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:37785
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    File URL: https://mpra.ub.uni-muenchen.de/37785/1/MPRA_paper_37785.pdf
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    References listed on IDEAS

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    1. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    2. Stephane Straub, 2011. "Infrastructure and Development: A Critical Appraisal of the Macro-level Literature," Journal of Development Studies, Taylor & Francis Journals, vol. 47(5), pages 683-708.
    3. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    4. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    5. Chani, Muhammad Irfan & Pervaiz, Zahid & Jan, Sajjad Ahmad & Ali, Amjad & Chaudhary, Amatul R., 2011. "Poverty, inflation and economic growth: empirical evidence from Pakistan," MPRA Paper 34290, University Library of Munich, Germany, revised 2011.
    6. Banerjee, Abhijit & Duflo, Esther & Qian, Nancy, 2012. "On the Road: Access to Transportation Infrastructure and Economic Growth in China," CEPR Discussion Papers 8874, C.E.P.R. Discussion Papers.
    7. Easterly, William & Rebelo, Sergio, 1993. "Fiscal policy and economic growth: An empirical investigation," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 417-458, December.
    8. Prakash Kumar Shrestha, 2009. "The Composition of Public Expenditure, Physical Infrastructure and Economic Growth in Nepal," NRB Economic Review, Nepal Rastra Bank, Research Department, vol. 21, pages 1-4, April.
    9. Escribano, Alvaro & Guasch, J. Luis, 2005. "Assessing the impact of the investment climate on productivity using firm-level data : methodology and the cases of Guatemala, Honduras, and Nicaragua," Policy Research Working Paper Series 3621, The World Bank.
    10. César Calderón & Luis Servén, 2010. "Infrastructure and Economic Development in Sub-Saharan Africa-super- †," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 19(suppl_1), pages 13-87.
    11. Peter Pedroni & David Canning, 2004. "The Effect of Infrastructure on Long Run Economic Growth," Department of Economics Working Papers 2004-04, Department of Economics, Williams College.
    12. Blanca Sanchez‐Robles, 1998. "Infrastructure Investment And Growth: Some Empirical Evidence," Contemporary Economic Policy, Western Economic Association International, vol. 16(1), pages 98-108, January.
    13. World Bank, 2007. "Pakistan : Infrastructure Implementation Capacity Assessment," World Bank Other Operational Studies 7671, The World Bank.
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    Citations

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    Cited by:

    1. Muhammad Shahid & Amjad Ali, 2015. "The Impact of Decentralized Economic Affairs Expenditures on Economic Growth: A Time Series Analysis of Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 4(3), pages 136-148, September.
    2. repec:eco:journ3:2019-05-13 is not listed on IDEAS
    3. Younis, Fizza, 2014. "Significance of Infrastructure Investment for Economic Growth," MPRA Paper 72659, University Library of Munich, Germany, revised 01 Jun 2015.
    4. repec:eco:journ3:2018-06-6 is not listed on IDEAS
    5. Bayu Agung Prasetyo & Dominicus Savio Priyarsono & Sri Mulatsih, 2013. "Infrastructure, economic growth and inequality in Indonesia land borders," Economic Journal of Emerging Markets, Universitas Islam Indonesia, Department of Economics, vol. 5(2), pages 99-108, April.

    More about this item

    Keywords

    Infrastructure; Economic Growth; Poverty; Economic Development; Investment; Labour;

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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