INVESTIGATING THE IMPACTS OF INFRASTRUCTURE, ECONOMIC FREEDOM, AND INDUSTRIALIZATION ON ECONOMIC GROWTH IN PAKISTAN

Abstract

This study examines the short-run and long-run empirical impacts of economic freedom, infrastructure, trade, industrialization, and FDI on economic growth in Pakistan using data for the period of 1990-2024. The study confirms the stationarity of all variables through ADF and PP unit root tests. All variables are found stationary at the first difference. The F-Bounds test validates the presence of cointegration in the model. To capture short-run and long-run estimates, the study employed the ARDL regression approach. Findings reveal that all explanatory factors have a positive and significant impact on economic growth. The error correction term confirms the presence of long run stable equilibrium in the model. Results highlight the favorable role of growing economic freedom, infrastructure development, enhancing industrialization, encouraging exports, and attracting FDI inflows to improve economic growth in Pakistan. The study advocates improving infrastructure, economic freedom, trade, FDI inflows, and growing industrialization for rapid economic growth in Pakistan.