Modeling the Impact of Export along with Government Education Spending on Economic Growth of Pakistan: An ARDL and Bound Test Approach

Abstract

The main focus of the present research work is to scrutinize the effect of export on the economic growth of Pakistan. For this motive, the research work put to use annual time sequence data for 46 years from1972 to 2018. In the affairs of dependent and independent variables, the make use of GD P as dependent and Exports, Exchange Rate, Capital Investment, Labour Force Participation Rate Education Spending and Inflation are utilized as independent variables. For data stationary justification, the study applied the Augmented Dickey-Fuller (ADF) unit root test. To find out the long–run and short-run results, the study used Autoregressive Distributed Lag (ARDL) approach. The empirical results show the optimistic and statistically significant effect of export on the GDP growth of Pakistan. Other independent variables like Capital Investment, Education Spending, and Labour Force Participation Rate also have a positive and unforgettable effect on the GDPP growth of Pakistan. Exchange Rate put a negative impact and significant in the long – run and Inflation put a positive effect on the GDP growth of Pakistan insignificant in the long – run.