UNIVERSITY OF THE PUNJAB

Submitted To:
Sir Akram

Submitted By:
Name Roll No 121 152

1. 2.

Uzma Rafiq Sadia Farooq

Email: sky_islimited@yahoo.com

Submission Date:
12th May, 2011

PUNJAB UNIVERSITY HAILLAY COLLEGE OF COMMERCE

Title of the Paper:

Determinants of Economic Growth in Pakistan

Main Article Title:

Economic Growth and its Determinants in Pakistan Authors:
Muhammad Shahbaz, Khalil Ahmad & A. R. Chaudhary

Year of Publishing:
2008

Journal in which published:

The Pakistan Development Review

Volume/Issue:
47 /4

Page Number:
471-486

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1. Article Title: Macroeconomic Determinants of Economic Growth in Pakistan Authors: Zafar Iqbal, & Ghulam Mustafa Zahid Year of Publishing: 1998 Journal in which published: The Pakistan Development Review Volume/Issue: 37/2 Page Number: 125-148

2. Article Title: Determinants of Economic Growth and Spreadbackwash Effects in Western and Eastern China Authors: Shanzi Ke Year of Publishing: June, 2010 Journal in which published: Asian Economic Journal Volume/Issue: 24/2 Page Number: 179-202

3. Article Title: External Determinants of Growth and Growth Projections: SAARC and Pakistan Authors: Faiza Amjad, & Naheed Zia Khan Year of Publishing: 2004 Journal in which published: The Pakistan Development Review Volume/Issue: 43/4 Page Number: 737-755

4. Article Title: Economic Growth of Rich and Poor Countries: A Social Accounting Matrix Approach Author: S.I. Cohen Year of Publishing: 1997 Journal in which published: The Pakistan Development Review Volume/Issue: 36/4 Page Number: 765-790

5. Article Title: Determinants of economic growth in China: Private enterprise, education, and openness Authors: Chen, Baizhu, & Feng, Yi Year of Publishing: 2000 Journal in which published: The Pakistan Development Review Volume/Issue: 11/1 Page Number: 1-15

Factors of Economic Growth: the case of Pakistan

Variable

Denoted by

Expected Sign

Proxy

Data source for variable

Dependent Variable

Gross Domestic Product Financial Development

WDI GDP FD FDI TR INF + + _ _ GDP per capita Credit to private sector as Share of GDP Foreign Direct Investment as Share Of GDP [(Export +Imports)/GDP] Inflation as Share of GDP WDI WDI

Foreign Direct Independent Investment Variables Trade Openness Annual Inflation

WDI WDI

Coefficientsa Unstandardized Coefficients Standardized Coefficients 95% Confidence Interval for B Lower Model 1 (Constant) Annual Inflation FDI (% of GDP) Domestic credit to private sector (% of GDP) Trade Opennes (% of GDP) -243.089 111.184 -.290 2.186 .046 -481.556 -4.623 -.258 -.505 -.28 1 .939 1.065 120.421 248.071 .109 .485 .635 -411.638 652.481 .685 .129 .062 .329 3.041 B Std. Error Beta t Sig. Bound Upper Bound Correlations Zeroorder Partial Part Tolerance VIF Collinearity Statistics

30402.604 7340.939 53.448 2106.132 74.039 629.075

4.142 .001 14657.855 46147.353 .099 .722 .482 .745 3.348 .005 -105.350 756.900 212.246 3455.364 .142 .812 .189 .093 .667 .431 .888 1.127 .335 2.987

a. Dependent Variable: GDP at Local Currency Unit

Model Summaryb Change Statistics R Model 1 R .876a Adjusted Std. Error of R Square Change F Change df1 4 df2 14 Sig. F Change .000 DurbinWatson 1.507

Square R Square the Estimate .768 .702 1614.782539

.768 11.599

a. Predictors: (Constant), Trade Opennes (% of GDP), Domestic credit to private sector (% of GDP), Annual Inflation, FDI (% of GDP) b. Dependent Variable: GDP at Local Currency Unit

ANOVAb Model 1 Regression Residual Total Sum of Squares 1.210E8 3.651E7 1.575E8 df 4 14 18 Mean Square 3.024E7 2607522.648 F 11.599 Sig. .000a

a. Predictors: (Constant), Trade Opennes (% of GDP), Domestic credit to private sector (% of GDP), Annual Inflation, FDI (% of GDP) b. Dependent Variable: GDP at Local Currency Unit

Collinearity Diagnosticsa Variance Proportions Domestic credit to private Eigenvalu Model Dimension 1 1 2 3 4 5 e 4.534 .305 .152 .007 .002 Condition Index 1.000 3.856 5.465 24.831 54.422 (Constant) .00 .00 .00 .03 .97 Annual Inflation .01 .11 .72 .02 .15 FDI (% of GDP) .00 .29 .05 .10 .55 GDP) .00 .00 .00 .16 .84 Trade of GDP) .00 .00 .01 .75 .24 sector (% of Opennes (%

a. Dependent Variable: GDP at Local Currency Unit

hettest Breusch-Pagan / Cook-Weisberg test for heteroskedasticity Ho: Constant variance Variables: fitted values of gdplcu chi2(1) = Prob > chi2 = 0.71 0.4011

. estat hettest Breusch-Pagan / Cook-Weisberg test for heteroskedasticity Ho: Constant variance Variables: fitted values of gdplcu chi2(1) = Prob > chi2 = 0.71 0.4011

. estat imtest, white White's test for Ho: homoskedasticity against Ha: unrestricted heteroskedasticity chi2(14) = Prob > chi2 = 18.73 0.1756

Cameron & Trivedi's decomposition of IM-test

Source Heteroskedasticity Skewness Kurtosis Total

chi2 18.73 7.22 1.52 27.47

df 14 4 1 19

p 0.1756 0.1249 0.2170 0.0942