The Role of Commercial Banks in Determining the Industrial Productivity in Pakistan: A Time Series Analysis
Keywords:
industrial production, labor force,, income per capita, creditAbstract
Industrial productivity is an important source of overall industrial growth. This paper has examined the role of
commercial banks in determining the industrial productivity in the case of Pakistan. Partial productivity or total
factor Productivity will be taken as a dependent variable and the impact of credit disbursed to industrial sector
will be examined along with other institutional credits are selected as independent variables. Time series data
from 1972-2015 has been obtained from Pakistan Economic Surveys and World Development Indicator to
observe the long- run relationship among the variables. ADF has been applied for checking the stationary status
of the data series. Diagnostic tests have been applied to examine the validity of the results. The estimated results
show that commercial bank credit and labor force participation rate have a positive and significant impact on
industrial productivity in the case of Pakistan. Income per capita has a negative and significant impact on
industrial productivity in the case of Pakistan. So, if the government of Pakistan wants to enhance industrial
productivity, it has to provide credit with skill labor force to its industrial sector.
