Asymmetric Impact of Globalization on Economic Growth in Pakistan by Using ARDI Model

Abstract

The main purpose of the present study is to examine either globalization affects economic growth or not in Pakistan. Time series data has collected from Pakistan covering the time from 1990- 2013. A time-series Autoregressive Distributed Lag (ARDL) model is used to establish the long run and the short run relationship between globalization and economic growth. Error Correction Model (ECM) is also used to check the short-run and long-run relationships among the globalization and economic growth. To determine the directional relationship, the Granger Causality test is being employed. To check the stability of the model CUSUM and CUSUMQ tests employed. The conclusions of this study showed a significantly negative association between Economic Globalization and Economic Growth. On the other hand, there is a significantly positive association between Political Globalization and Economic Growth. While the relationship between Social Globalization and Economic Growth has founded a significantly positive. However, our research paper provides simultaneous valuable information for policymakers to remove the red tape barriers and focus on one window operation.