The Determinants of Industrial Output in Pakistan: A Time Series Analysis
Year: 2024
Type: article
Abstract: This study investigates the determinants of industrial growth in Pakistan through an empirical analysis of quarterly data spanning from 1970 to 2022. Industrial growth is the dependent variable, while the inflation rate, rate of exchange, foreign direct investment, gross fixed capital formation, and terms of trade are independent variables. The Autoregressive Distributed Lag (ARDL) model was employed due to the mixed stationarity, as indicated by the augmented dickey-fuller test. The results reveal a positive long-run relationship between FDI and industrial growth, as well as between gross fixed capital formation and industrial growth. Conversely, a negative relationship is observed between the exchange rate and industrial growth, and between the interest rate and industrial growth. All variables to be statistically significant, except for terms of trade. Furthermore, the inflation rate and rate of exchange show a reducing impact on industrial growth, while FDI and gross fixed capital formation contribute positively to industrial growth.
Source: Global Regional Review
Authors: Afaq Amjid, Mukamil Shah, Noorulain -
Institution: Institute of Management Sciences Peshawar
Language: English
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4403032361