Trade Openness, Market Capitalization and Entrepreneurial Ventures: Implications for Business and Industrial Growth of Pakistan

Abstract

The activities of entrepreneurs, market capitalization and trade openness have a significant impact on accelerating the process of industrialization in Pakistan. Economic integration is promoted by trade openness by giving access to new markets and technological advancements to local companies that increase competition, productivity and efficiency. The attractiveness of the business environment and the confidence of investors are gauged by market capitalization. A strong market capitalization gives access to funding for growth and innovation by drawing in both domestic and foreign investment. Entrepreneurship drives innovation, employment opportunities and diversification by infusing the economy with validity and invention. Pakistan can unlock its full potential and open the door to sustainable business and industrial growth. The study aims to seek the effect of trade openness, market capitalization and entrepreneurial ventures on industrial value added or industrial growth in Pakistan by taking the time series data over the period 2000-2022. The study has used the Autoregressive Distributive Lag Model (ARDL). The results point out that lending interest rates and taxes have a negative impact on industrial value added while inflation, trade, market capitalization, secondary school enrollment, private sector credit, and energy consumption show a favorable influence on industrial value added. The study has suggested that policymakers need comprehensive strategies for the expansion of the industry, with fiscal policies to manage inflation, foster competitiveness, and promote trade openness and market capitalization.