DETERMINANTS OF MANUFACTURING VALUE ADDED IN PAKISTAN: AN APPLICATION OF BOUNDS TESTING APPROACH TO COINTEGRATION
Journal Title: Pakistan Economic and Social Review - Year 2010, Vol 48, Issue 2
Abstract
This study employed bounds test based cointegration technique using annual time series data from 1965 to 2007 for exploring determinants of manufacturing value added in Pakistan. Three determinants included in the study were: total factor productivity (TFP), price level of investment and trade openness. TFP turned out to be the most significant determinant of manufacturing value added both in the short and long run. The price level of investment affected manufacturing value added negatively and significantly. Trade openness, however, turned out to be insignificant. The study recommends enhancement of TFP and stabilizing prices of investment goods for accelerating growth of manufacturing value added in Pakistan.
Authors and Affiliations
MUHAMMAD ILYAS, HAFIZ AHMAD, TAHIR MAHMOOD
Keywords
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