Testing Export-Led Growth Paradigm for Pakistan's Agriculture Sector

Abstract

The rationale behind this analysis is to analyze the role of agricultural
exports in the economic growth of Pakistan using annual data for the period
1980 to 2010. We have estimated simultaneous equation model using
Generalized Method of Moments (GMM). Empirical results of this study
validate the paradigm of export led growth in Pakistan showing positive
contribution of agricultural exports in achieving economic growth. The study
advocates foreign income and relative export price variables as critical
determinants of export demand. It is also suggestive of the fact that domestic
production capacity and export prices relative to domestic wholesale prices
also have a positive effect on export supply to the world market.