IMPACT OF INDUSTRIAL SECTOR ON GDP (PAKISTAN CASE)

Abstract

This study is an attempt to investigate the relationship between economic growth and different components of industrial sector of the economy of Pakistan. For this purpose the secondary data for 61 years from 1950 to 2010 is used. The first step in the empirical analysis involves testing the time series characteristics of the data series using ADF tests. Simple linear regression and time series techniques are applied to estimate the relationships. All the variables used in this study are stationary in their first differences. Regarding the hypotheses of the study it is concluded that the entire hypothesis, has a positive impact on GDP, partially accepted. Because in simple linear regression all the components of industrial sector show a positive relationship with GDP except mining and quarrying sector that not only shows the negative relationship but also gives an insignificant result. All other results are statistically significant and consistent in simple linear regression.