Abstract
This review emphasized the relationship among capital formation, economic growth, exports and imports in case of Pakistan scenario using time series data from 1976 to 2015. Augmented Dickey Fuller Test, Johansen Co-integration, Vector error correction model and Granger Causality techniques have been used to check the relationships among exports, imports and economic growth. The results from this study show that the exports, imports, real GDP and gross fixed capital formation have a long run relationship and are co-integrated. This study uses the data of Pakistan and concludes that GDP doesn’t granger cause with the export and import while export and imports do granger cause with the GDP in the long run. Finding of the study also displays that physical capital formation has no impression over GDP. Previous study shows the positive relation among exports, imports, capital formation and economic growth while this study shows that in the long run capital formation and economic growth has no effect. Government subsidizes the exports and also increases the duty bills on imports that help boost the domestic industries manufacture the goods and motivate to produce the best quality of goods.
 JEL codes: F2, O47
Highlights
Export is a function of international trade whereby goods produced in one country and shipped to another country for future sale or trade
Economic growth is the part and parcel of economic development and a question arises here that how a country can increase their economic growth through various resources? The answer of this question is hidden in the export-led growth (ELG) formula which means that an increment in the export can increase the economic growth
Pakistan is a developing country and previous researches are conducted on the basis of the export-led growth, imports, gross fixed capital formation and economic growth is done by Ullah (2009) which scrutinized the export-led growth in case of Pakistan in this range
Summary
Export is a function of international trade whereby goods produced in one country and shipped to another country for future sale or trade. Export led growth and import substitution are considered important marvels for the development of economic growth as well as a best reward of all factors of production This mechanism upsurges the investment channels which cause high savings along with high income. As Pakistan is an emerging economy that needs to enhance exports and foreign reserves in order to meet the level of economic growth This can be used to fulfil the necessities of the country by importing the scarce resources. Pakistan is a developing country and previous researches are conducted on the basis of the export-led growth, imports, gross fixed capital formation and economic growth is done by Ullah (2009) which scrutinized the export-led growth in case of Pakistan in this range. Country’s exports enable to incorporate international markets in such a way that it compensates bad domestic shocks of
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
