Globalisation and Economic Growth Nexus: Empirical Evidence from Pakistan

Abstract

Globalisation has several faces and a variety of social, political, and economic ramifications. It has given many countries numerous opportunities. Others argue that today's globalisation is only tangentially different from colonialism in the past. Since affluent countries levy taxes on developing-country commodities, developing countries have not benefited from this. Developed countries' protection of agriculture and basic manufacturing has harmed developing countries significantly. Pakistan has made significant efforts to integrate its economy with the rest of the world through foreign commerce, investment, and other macroeconomic policies. Globalisation's sufficiency and utility are seen from a variety of angles. Based on solid factual evidence, it is vital to analyse whose viewpoints are supported by Pakistan's experience. Because Pakistan's economy has been liberalised, it also seeks to decrease poverty, which may be achieved through acceptable economic progress. Because Pakistan's economy has been liberalised, it also seeks to decrease poverty, which may be achieved through acceptable economic progress. The paper investigates the impact of globalisation on the economic growth of Pakistan over the period from 1971 to 2021, employing the ARDL approach. Economic growth was measured through the annual growth rate, whereas; KOF Globalization Index was used to measure globalisation. Instead, the inflation rate, FDI, official development assistance, gross capital formation, and labour force participation rate have also been taken into account in the model. The study's findings have proven the negative impact of globalisation on economic growth in Pakistan. The findings suggested that despite several years of openness policies related to trade, FDI, or technological transfer, Pakistan is still not ready to gain the positive effects of globalisation; Therefore, there is a need to adhere to policies that promote trade and investment considering the ground realities of Pakistan.