China–Pakistan Economic Corridor, Logistics Developments and Economic Growth in Pakistan

Zunaira Khadim,Irem Batool,Muhammad Bilal Lodhi

doi:10.3390/logistics5020035

Abstract

The study aims to analyze the impact of China–Pakistan Economic Corridor (CPEC) logistics-related developments on economic growth in Pakistan. The study defined a Cobb–Douglas type of research framework in which the country’s real income level relates to four factor inputs, e.g., employed labor force, logistics development, financial development, and energy consumption in an economy. The study utilized the time series data set for the period 1972–2018. To estimate the long run relationship and short run adjustment mechanism, the study used Johansen’s method of co-integration and error correction model. Estimated results showed that the country’s logistics developments have a significant positive impact on economic growth in both the long run and the short run. It implies that China–Pakistan collaborative efforts for logistics developments will have a strong positive impact on economic growth in Pakistan.

Highlights

Logistics 2021, 5, 35. https://doi.org/China’s One Belt and One Road (B & R) Initiative is a giant project, under which the Chinese government intends to reconstruct the ancient ‘Silk Road’ in a contemporary mode in the vast area extending from China to Europe [1]
A large number of infrastructure development projects such as highways, railways, pipelines, electric transmission networks, airports, and various other related matters are under construction in China, the Central Asian countries and in various parts of connected countries
A number of studies have utilized the electricity generation, telecommunications, and access to roads and highways as an economic driver of economic growth in Pakistan utilizing a different set of variables in different time periods [11,12,13], but no attempt has been made to investigate the impact of the logistics industry as aggregate on the economy

Summary

Introduction

China’s One Belt and One Road (B & R) Initiative is a giant project, under which the Chinese government intends to reconstruct the ancient ‘Silk Road’ in a contemporary mode in the vast area extending from China to Europe [1]. US$400 billion in the Iranian economy over the period of the 25 years and would benefit from a smooth and low-priced huge supply of oil in exchange It would boost a variety of economic activities such as oil mining, industrial development, transportation infrastructure, agricultural collaborations, as well as cultural and tourism activities among both partner countries. A number of studies have utilized the electricity generation, telecommunications, and access to roads and highways as an economic driver of economic growth in Pakistan utilizing a different set of variables in different time periods [11,12,13], but no attempt has been made to investigate the impact of the logistics industry as aggregate on the economy.

Theoretical Framework

Empirical Results and Discussion

Summary Findings and Conclusions

Policy Implications