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Factors affecting the services sector growth in Pakistan: A time varying parametric approach

Journal of Economics Library

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Title Factors affecting the services sector growth in Pakistan: A time varying parametric approach
 
Creator ZEB, Ambreen; Department of Economics, University of Sindh, Jamshoro, Pakistan
HUSSAIN, Khadim; Department of Economics, Mirpur University of Science & Technology, Mirpur, AJK, Pakistan
AHMAD, Usman; Director Planning & Development/Chairperson Department of Economics, University of Management Sciences & Information Technology, Kotli, AJK, Pakistan
AJMAIR, Muhammad; Mirpur University of Science and Technology
 
Subject Services sector; Kalman filter; Rolling regression; Inflation; Foreign direct investment.
F21; F40; N57; O13.
 
Description Abstract. This empirical study followed time varying parametric approach (Kalman Filter) to find out relevant determinants of Pakistan’s services sector’s growth. To our best of knowledge, no author has made such study that could collect a number of variables from existing empirical literature and capture the impact of structural changes on relevant determinants of services sector growth in Pakistan while employing Kalman Filtering approach. Current study bridges this gap. Annual data was taken from World Development Indicators (2014) during period 1976-2014. Main findings of the study are that rolling regression estimates of explanatory variables justify the use of Kalman filtering approach. The state space Results show that foreign direct investment and gross national expenditures are positive and significant determinants of services sector growth while inflation, domestic credit to private sector, gross fixed capital formation, and remittances received and trade openness have negative impact on services sector growth. One step ahead graph inflation, domestic credit to private sector, foreign direct investment, gross national expenditures, gross fixed capital formation, remittances received and trade openness indicate that model estimated was stable as critical bounds(dotted line) in graph 2 are not crossed by central line. Based on empirical findings, it is recommended the concerned authorities to augment gross national expenditures and foreign direct investment to achieve long run services sector growth for better economic growth in country.Keywords. Services sector, Kalman filter, Rolling regression, Inflation, Foreign direct investment.JEL. F21, F40, N57, O13.
 
Publisher Journal of Economics Library
 
Contributor —
 
Date 2017-09-18
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://www.kspjournals.org/index.php/JEL/article/view/1416
10.1453/jel.v4i3.1416
 
Source Journal of Economics Library; Vol 4, No 3 (2017): September; 388-395
2149-2379
 
Language eng
 
Relation http://www.kspjournals.org/index.php/JEL/article/view/1416/1454
 
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