The impact of economic globalisation on macroeconomic performace in Pakistan (1980–2010)

This study is devoted to empirically investigate the association between Globalization and economic growth in context of Pakistan for the period 1980–2010. Globalization is defined in this paper as trade openness and financial integration (Net capital flow) FDI, Foreign Aid and worker remittances for capital inflow and capital outflow is proxied by Debt servicing. Other important variables are also included to the model because of their importance. These inputs are gross domestic investment (GDI) and human resource development (HRD). ARDL technique is employed to achieve the basic goal of the study. This study employed Bound testing procedure to co-integration. The co-integration results reported long fun relationship between the mentioned variables. Trade openness affects positively and significantly economic growth both in the short and long run. The impact of financial openness is negatively and significant. The overall impact of globalization is positive because the coefficient of trade openness is higher and more significant than financial integration. Domestic investment and human resource development positively and significantly affect economic growth in Pakistan. The government of Pakistan should focus on more open and liberal policies regarding trade and formulate growth promoting foreign investment policies. The process of globalization with adequate policies will certainly benefit economic growth in Pakistan.