Open AccessInvestigating the Nexus between Productivity and Export Performance of Pakistan
Author(s) -
Asma Saeed,
Zahoor Ul Haq,
Javed Iqbal
Publication year - 2018
Publication title -
global economics review
Language(s) - English
Resource type - Journals
eISSN - 2707-0093
pISSN - 2521-2974
DOI - 10.31703/ger.2018(iii-ii).10
Subject(s) - total factor productivity , productivity , distributed lag , foreign direct investment , agricultural productivity , nexus (standard) , economics , proxy (statistics) , export performance , agriculture , international trade , exchange rate , production (economics) , international economics , monetary economics , econometrics , macroeconomics , engineering , ecology , machine learning , biology , computer science , embedded system
An increase in productivity has been associated with better export performance by increasing the efficiency of the factors of production. Further, productivity leads to a reduction in production costs and an increase in comparative advantage in the international market. In this study, the Autoregressive distributed lag (ARDL) bound test is used to investigate the nexus between productivity and export performance of agricultural and manufacturing sectors of Pakistan. The study uses secondary data from 1990 to 2016 to estimate the total factor productivity (TFP) and then uses it as a proxy of productivity. Our results show that TFP and gross domestic product (GDP) have a significant and positive impact on the export performance of Pakistan. Foreign direct investment (FDI), real exchange rate and cost to export are found to be negatively related to Pakistans export performance. In the long run, both the sectors (agricultural and manufacturing) need improvement in productivity in order to be competitive in intentional markets.