Impact of Globalization on Poverty in Pakistan

Abstract

Globalization is a multidimensional concept that affects differently the economic growth of different countries and also different sectors of the economy. The main determination of the study was to examine the influence of globalization on the industrial sector growth because Pakistan is an agricultural country due to it heavily based on agriculture production. The study examines the long and short effects of globalization on the industrial sector of Pakistan's economy. Globalization (KOF) index is used for Globalization, time-series data for the years 1980 to 2018 is utilized. To check the stationarity Augmented Dickey-Fuller (ADF) test is used. Auto-Regressive Distributive Lag (ARDL) model has been applied to estimate the long and short-run association among industrial sector growth, globalization, and explanatory variables. After diagnostics, the error correction model evidenced the existence of long-run Co-Integration Exits among industrial sector growth and globalization. Globalization boosted the growth of the industrial sector in Pakistan. Also, globalization boosts economic development and industrial production by importing the new machinery that upsurge the agriculture production level and economic expansion. Regulatory authorities need to boost the globalization level by trade agreements.