Journal of Contemporary Issues in Business Research

ISSN 2305-8277
The Relationship between Trade Openness and Economic Growth: A Case Study of Pakistan
The Relationship between Trade Openness and Economic Growth: A Case Study of Pakistan
Faiza Yaseen, 1 Ikram Ullah Khan, 2and Safeer Ullah Khan3
Author Affiliations
  • 1 Islamia University of Bahawalpur
  • 2 School of Management, University of Science and Technology of China, Peoples Republic of China
  • 3 CECOS University of Information Technology and Emerging Sciences

  • Abstract

    The aim of this study is to examine the short-run, long-run, and causal relationship among trade openness and economic growth in Pakistan. To test the hypotheses of this study, a time series data for the period of 1973-2010 was used. Macroeconomics variables such as Economic growth, value of real gross domestic product (GDP), value of exports (XP) and value of imports (MP) are variables of interest in current study. To study the long-run, short-run and causal relationships among trade openness and economic growth, Co-integration and Granger causality tests are used in this study. The results of this study support the long-run relationship among trade openness and growth. The findings of this paper are unidirectional causality from export to growth and import and from growth to imports but did not find any bidirectional causality relationship among the variables.

    Keywords
    Trade openness, Economic growth, Gross domestic product, Pakistan.

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    First published online before print: 2015
    Vol. 4, No. 4, 2015, pp. 103-113
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