Economics at your fingertips  

Export-Led Growth Hypothesis in Pakistan: A Reinvestigation Using the Bounds Test

Saima Siddiqui (), Sameena Zehra (), Sadia Majeed () and Muhammad Sabihuddin Butt ()
Additional contact information
Saima Siddiqui: University of Karachi, Pakistan.
Sameena Zehra: University of Karachi, Pakistan.
Sadia Majeed: University of Karachi, Pakistan
Muhammad Sabihuddin Butt: University of Karachi, Pakistan.

Lahore Journal of Economics, 2008, vol. 13, issue 2, 59-80

Abstract: Trade is presumed to act as a catalyst to economic growth. This paper reinvestigates the export-led growth hypothesis in Pakistan by using annual time series data on exports, imports, terms of trade, and the labor force participation rate as explanatory variables and gross domestic product (GDP) as the dependent variable for the period 1971-2005. The study uses the more comprehensive and recent bounds test or autoregressive distributed lag model (ARDL) proposed by Pesaran et al (2001) to examine the existence of short-run and long-runrelationships between exports and economic growth, which is crucial indesigning policy to enhance trade-related potential in Pakistan. The results indicate that exports, labor force, and imports have a positive effect on growth, while the terms of trade has a negative effect. The proxy for trade liberalization has a positive impact on economic growth. Finally, the chief finding of this study is that the hypothesis of export-led growth in the Pakistan economy is supported in both the short and long run. Economicgrowth in Pakistan is accompanied by fluctuations in exports and imports both in the short and long run, but the labor force participation rate has a negative effect only in the short run. The terms of trade has the same effect in the short and long run.

Keywords: Economic Growth; Exports; Imports; Labor Force Participation. (search for similar items in EconPapers)
JEL-codes: C22 F49 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link) (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

More articles in Lahore Journal of Economics from Department of Economics, The Lahore School of Economics Contact information at EDIRC.
Series data maintained by Shahid Salahuddin ().

Page updated 2017-09-29
Handle: RePEc:lje:journl:v:13:y:2008:i:2:p:59-80