The Impact of Exports Diversification on Economic Growth: Evidence from Pakistan

Authors

Sonia Liaqat COMSATS Institute of Information Technology Vehari –Pakistan Author
Muhammad Irfan Chani COMSATS Institute of Information Technology Vehari –Pakistan Author

exports, economic growth,, Pakistan

The paper explores the impact of export diversification on the economic growth in Pakistan. Augmented Dickey

Fuller unit root test Bound F test results, estimated long run coefficients and ARDL short run Error Correction

Model (ECM-ARDL) results applied for the empirical estimation of the study. Gross domestic product per capita,

export diversification, is stationary at first difference and real effective exchange rate and population density are

stationary at level. Export, real effective exchange rate and population density positively effect on economic growth.

Human capital formation is negatively affected on economic growth. The bound testing approach to Co integration

is used during 1980 to 2015. This test suggests that in long run series of interest are linked together. In the mid of

year equilibrium is fairly fast and restored. Government should increase discoveries because about foreign demand

would lead to imitation and therefore increased local production for exports and higher growth. Government should

therefore intervene by creating the right incentives for investment.