Nexus of trade, investment and poverty: evidence from Pakistan
Poverty alleviation, a complex multidimensional phenomenon, is among the most formidable challenges for policymakers in developing nation. Despite mixed results on the long term impact on poverty, the general view is that if implemented and managed carefully, trade and investment can help promote economic growth and alleviate poverty. The paper empirically examines the impact of trade and investment on poverty alleviation in Pakistan by employing the Johansen-Juselius (1990) approach to cointegration for a long run relation; and the error correction mechanism for the short run dynamics. The results suggest that poverty alleviation policy has brought fruition in Pakistan and helped achieve the objective both in the short and the long run. The findings should help policymakers determine appropriate strategy in addressing the economic growth vis-à-vis poverty. While investment is a key to promoting economic growth, trade openness can also help by improving business climate through access to modern capital and technical know-how; and lead to sustained economic growth in Pakistan.
|Date of creation:||05 May 2012|
|Date of revision:||20 May 2012|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fan, Shenggen & Zhang, Linxiu & Zhang, Xiaobo, 2004. "Reforms, Investment, and Poverty in Rural China," Economic Development and Cultural Change, University of Chicago Press, vol. 52(2), pages 395-421, January.
- Shenggen Fan & Peter Hazell & Sukhadeo Thorat, 2000. "Government Spending, Growth and Poverty in Rural India," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 1038-1051.
- Shenggen Fan & Xiaobo Zhang, 2008.
"Public Expenditure, Growth and Poverty Reduction in Rural Uganda,"
African Development Review,
African Development Bank, vol. 20(3), pages 466-496.
- Fan, Shenggen & Zhang, Xiaobo & Rao, Neetha, 2004. "Public expenditure, growth, and poverty reduction in rural Uganda," DSGD discussion papers 4, International Food Policy Research Institute (IFPRI).
- Dodzin, Sergei & Vamvakidis, Athanasios, 2004. "Trade and industrialization in developing economies," Journal of Development Economics, Elsevier, vol. 75(1), pages 319-328, October.
- Nanak Kakwani & Shahid Khandker & Hyun H. Son, 2004. "Pro-poor growth: concepts and measurement with country case studies," Working Papers 1, International Policy Centre for Inclusive Growth.
- Muhammad Shahbaz Akmal & Qazi Masood Ahmad & Mohsin Hussain Ahmad & Muhammad Sabihuddin Butt, 2007. "An Empirical Investigation of the Relationship between Trade Liberalization and Poverty Reduction: A Case for Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 12(1), pages 99-118, Jan-Jun.
- T. S. Breusch & A. R. Pagan, 1980. "The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 239-253.
- Breusch, T.S. & Pagan, A.R., "undated". "The Lagrange multiplier test and its applications to model specification in econometrics," CORE Discussion Papers RP 412, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Addison, Douglas & Wodon, Quentin, 2007. "Macroeconomic Volatility, Private Investment, Growth, and Poverty in Nigeria," MPRA Paper 11113, University Library of Munich, Germany.
- Fan, Shenggen & Zhang, Linxiu & Zhang, Xiaobo, 2002. "Growth, inequality, and poverty in rural China: the role of public investments," Research reports 125, International Food Policy Research Institute (IFPRI).
- Pierre-Richard Agénor, 2004. "Does globalization hurt the poor?," International Economics and Economic Policy, Springer, vol. 1(1), pages 21-51, 03.
- Agenor, Pierre-Richard, 2002. "Does globalization hurt the poor?," Policy Research Working Paper Series 2922, The World Bank.
- Haroon Jamal, 2006. "Does Inequality Matter for Poverty Reduction? Evidence from Pakistan’s Poverty Trends," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(3), pages 439-459.
- Ann Harrison & Margaret McMillan, 2007. "On the links between globalization and poverty," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(1), pages 123-134, April.
- Joseph Stiglitz, 2003. "Globalization and the economic role of the state in the new millennium," Industrial and Corporate Change, Oxford University Press, vol. 12(1), pages 3-26, February.
- Nahar, Bodrun & Siriwardana, Mahinda, 2009. "Trade Liberalisation and Poverty in Bangladesh: A General Equilibrium Approach," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 47629, Australian Agricultural and Resource Economics Society.
- Fan, Shenggen & Zhang, Linxiu & Zhang, Xiaobo, 2000. "Growth and poverty in rural China: the role of public investments," EPTD discussion papers 66, International Food Policy Research Institute (IFPRI).
- Pravin Krishna, 2003. "Are Regional Trading Partners "Natural"?," Journal of Political Economy, University of Chicago Press, vol. 111(1), pages 202-231, February.
- Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 39(3), pages 106-135.
- Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-276, March.
- Raihan, Selim, 2008. "Trade Liberalization and Poverty in Bangladesh," MPRA Paper 37905, University Library of Munich, Germany.
- Osmani, S.R., 2005. "The impact of globalization on poverty in Bangladesh," ILO Working Papers 993870563402676, International Labour Organization.
- Jagdish Bhagwati, 2002. "Trade and Poverty in the Poor Countries," American Economic Review, American Economic Association, vol. 92(2), pages 180-183, May.
- repec:ilo:ilowps:387056 is not listed on IDEAS
- MacKinnon, James G, 1996. "Numerical Distribution Functions for Unit Root and Cointegration Tests," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(6), pages 601-618, Nov.-Dec..
- James G. MacKinnon, 1995. "Numerical Distribution Functions for Unit Root and Cointegration Tests," Working Papers 918, Queen's University, Department of Economics.
- Nabil Annabi & Fatou Cissé & John Cockburn & Bernard Decaluwé, 2005. "Trade Liberalisation, Growth and Poverty in Senegal: a Dynamic Microsimulation CGE Model Analysis," Working Papers 2005-07, CEPII research center.
- Nabil Annabi & Fatou Cissé & John Cockburn & Bernard Decaluwé, 2005. "Trade Liberalisation, Growth and Poverty in Senegal: a Dynamic Microsimulation CGE Model Analysis," Cahiers de recherche 0512, CIRPEE.
- Bhagwati, Jagdish, 2004. "Anti-globalization: why?," Journal of Policy Modeling, Elsevier, vol. 26(4), pages 439-463, June. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:39068. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If references are entirely missing, you can add them using this form.