EXPORT-GROWTH NEXUS WHILE USING THE BLOCK EXOGENEITY: EMPIRICAL EVIDENCE FROM PAKISTAN
EXPORT-GROWTH NEXUS WHILE USING THE BLOCK EXOGENEITY: EMPIRICAL EVIDENCE FROM PAKISTAN

Summary/Abstract: The core objective of the study is to analyze the association between export and economic growth under the consideration of the time frame 1967 to 2017 for Pakistan economy. The review of literature assists to find out the frequently utilize factors are the real GDP per capita, export, import, trade openness, fiscal development and capital formation pos-sible determinants of the economic growth. However, Export Led Growth (ELG) hypoth-esis is oftenly employed to elaborate the affiliation between export and the growth. Auto-regressive distributed lag (ARDL) bound test approach to cointegration accompanied with the structural break and vector auto regressive (VAR) are employed to analysis the long-term association among real GDP per capita, export, import, trade openness, fiscal development and capital formation. The empirical analysis confirms the cointegration amongthe factors and the ELG hypothesis holds in Pakistan economy. The Block Exog-eneity reveals that export and the capital formation have strong influence to stimulate the economic growth. While all the other factors have cumulative influence on the growth. Moreover, the impulse response exposes that if the shock of real GDP per capita, import, trade openness, fiscal development and the capital formation are given to the export, then response of export would be positive in thecoming time frame.

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