IDEAS home Printed from https://ideas.repec.org/a/pid/journl/v43y2004i4p737-755.html
   My bibliography  Save this article

External Determinants of Growth and Growth Projections: SAARC and Pakistan

Author

Listed:
  • Faiza Amjad

    (Fatima Jinnah Women's University, Rawalpindi.)

  • Naheed Zia Khan

    (Fatima Jinnah Women's University, Rawalpindi.)

Abstract

In the global trading arena, the regional integration perhaps represents the most important legacy of the 20th century. This paper focuses on the scope and promise of economic cooperation between the SAARC region countries. Descriptive statistics is used to provide the evidence for the argument that very high share of trade in the GDP of the region’s economies exposes them to external shocks in a potentially harmful manner, and these countries ought to be paying greater attention to increasing the size of their economies. In order to determine the importance of the external sector in the economies of the region, a simultaneous equations model is formulated and estimated, utilising the pooled data for the period from 1972–2001, by applying the 2SLS technique. The coefficients of two of the three external sector variables included in the model, namely, export earnings and trade balance, turn out to be significant, providing the evidence on the importance of the external sector in the economic growth of the SAARC region countries. Keeping in view that Pakistan needs to adopt sustainable growth strategies, the authors maintain that extended economic cooperation within the SAARC region is the most viable alternative for the country. The argument is substantiated with the help of inferential statistics, providing the evidence that exports to SAARC countries are positively related with the economic growth of Pakistan. The simulation output also shows that increasing and diverting the country’s exports to the SAARC region have positive impact in terms of growth projections. By estimating and simulating another model, it is inferred that in the short run, diverting exports to both the SAARC and ASEAN region countries appears to be a viable strategy to help Pakistan move towards greater integration within the SAARC region, and that the SAARC forums must make meaningful progress in terms of delivering concrete results.

Suggested Citation

  • Faiza Amjad & Naheed Zia Khan, 2004. "External Determinants of Growth and Growth Projections: SAARC and Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 43(4), pages 737-755.
  • Handle: RePEc:pid:journl:v:43:y:2004:i:4:p:737-755
    as

    Download full text from publisher

    File URL: http://www.pide.org.pk/pdf/PDR/2004/4/PartII/Naheed%20Zia%20Khan.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Michael Kremer, 1993. "The O-Ring Theory of Economic Development," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 551-575.
    2. A.R. Kemal, 1994. "Structural Adjustment, Employment, Income Distribution and Poverty," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 33(4), pages 901-914.
    3. Sheila Page, 2000. "Regionalism among Developing Countries," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-333-98268-6, December.
    4. Wood, Adrian & Mayer, Jorg, 2001. "Africa's Export Structure in a Comparative Perspective," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 25(3), pages 369-394, May.
    5. Tilat Anwar, 1996. "Structural Adjustment and Poverty: The Case of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 35(4), pages 911-926.
    6. Lall, Sanjaya, 1999. "India's Manufactured Exports: Comparative Structure and Prospects," World Development, Elsevier, vol. 27(10), pages 1769-1786, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Muhammad Jamil & Rao Muhammad Atif & Khalid Zaman, 2013. "Internal and External Determinants of Economic Growth: A closer look at Pakistan’s Economy," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 16(49), pages 73-90, September.
    2. Muhammad Akram & Syed Shabihul Hassan & Muhammad Farhan & Hassan Mobeen Alam, 2011. "Empirical Analysis of Determinants of Economic Growth: Evidence from SAARC Countries," Journal of Economics and Behavioral Studies, AMH International, vol. 3(2), pages 115-121.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. S. M. Naseem, 2012. "A Review Of Studies On Poverty In Pakistan: Origin, Evolution, Thematic Content And Future Directions," PIDE Books, Pakistan Institute of Development Economics, number 2012:1 edited by Rashid Amjad, October.
    2. David E. Bloom & Jeffrey D. Sachs, 1998. "Geography, Demography, and Economic Growth in Africa," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(2), pages 207-296.
    3. Siddiqui, Rizwana & Iqbal, Zafar, 1999. "TARIFF REDUCTION AND FUNCTIONAL INCOME DISTRIBUTION IN PAKISTAN: A CGE Analysis," MPRA Paper 6141, University Library of Munich, Germany.
    4. Zafar Iqbal & Rizwana Siddiqui, 1999. "Distributional Impact of Structural Adjustment on Income Inequality in Pakistan: A SAM-based Analysis," MIMAP Technical Paper Series 1999:02, Pakistan Institute of Development Economics.
    5. Zafar Iqbal & Rizwana Siddiqui, 1998. "The Impact of Structural Adjustment on Income Distribution in Pakistan A SAM-based Analysis," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 37(4), pages 377-397.
    6. Khan, Rana Ejaz Ali & Nawaz, Muhammad Atif & Hussain, Altaf, 2011. "Impact evaluation of structural adjustment program: a case of Pakistan," MPRA Paper 34835, University Library of Munich, Germany.
    7. Nathalie Greenan & Marc-Arthur Diaye & Patricia Crifo, 2004. "Pourquoi les entreprises évaluent-elles individuellement leurs salariés ?," Économie et Prévision, Programme National Persée, vol. 164(3), pages 27-55.
    8. Simeon D. Alder, 2016. "In the Wrong Hands: Complementarities, Resource Allocation, and TFP," American Economic Journal: Macroeconomics, American Economic Association, vol. 8(1), pages 199-241, January.
    9. John S. Heywood & W.S. Siebert & Xiangdong Wei, 2011. "Estimating the Use of Agency Workers: Can Family-Friendly Practices Reduce Their Use?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 50(3), pages 535-564, July.
    10. Krause, M.U., 2002. "Inter-Industry Wage Differentials and Job Flows," Discussion Paper 2002-3, Tilburg University, Center for Economic Research.
    11. Azariadis, Costas & Stachurski, John, 2005. "Poverty Traps," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 5, Elsevier.
    12. Udo Kreickemeier & Jens Wrona, 2017. "Two-Way Migration between Similar Countries," The World Economy, Wiley Blackwell, vol. 40(1), pages 182-206, January.
    13. Yaron Leitner, 2004. "Financial networks: contagion, commitment, and private sector bailouts," Working Papers 02-9, Federal Reserve Bank of Philadelphia.
    14. Luis Garicano & Thomas N. Hubbard, 2016. "The Returns to Knowledge Hierarchies," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 32(4), pages 653-684.
    15. Jordi Brandts & David J. Cooper, 2005. "It's What You Say Not What You Pay," UFAE and IAE Working Papers 643.05, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    16. Jarle Moen, 2005. "Is Mobility of Technical Personnel a Source of R&D Spillovers?," Journal of Labor Economics, University of Chicago Press, vol. 23(1), pages 81-114, January.
    17. Josef Falkinger & Volker Grossmann, 2003. "Workplaces in the Primary Economy and Wage Pressure in the Secondary Labor Market," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 159(3), pages 523-544, September.
    18. Zafar Mahmood, 1998. "A Social Sector Strategy for Pakistan," PIDE-Working Papers 1998:163, Pakistan Institute of Development Economics.
    19. Steven N. Durlauf & Ananth Seshadri, 2003. "Is assortative matching efficient?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 21(2), pages 475-493, March.
    20. David Rezza Baqaee & Emmanuel Farhi, 2019. "The Macroeconomic Impact of Microeconomic Shocks: Beyond Hulten's Theorem," Econometrica, Econometric Society, vol. 87(4), pages 1155-1203, July.

    More about this item

    Keywords

    Trade; Economic Growth; Pakistan;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pid:journl:v:43:y:2004:i:4:p:737-755. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Khurram Iqbal (email available below). General contact details of provider: https://edirc.repec.org/data/pideipk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.