Papers for Forthcoming Issues

1- A Dynamic Study of Child Labour Market and its Determinants in Pakistan: A Time Series Analysis
by Usman Azhar and Prof. Dr. Samina Khalil

Abstract

This paper is aiming to investigate the long run and short run dynamics of the important determinants of child labour at macroeconomic level in case of Pakistan. The import distinction of this paper is that it is the first attempt to investigate the long run and short impacts of determinants of child labour by using time series estimation technique of Autoregressive Distributive Lags Model (ARDL). The long run findings suggest that an increase in GDP per capita and gross primary school enrollments lead towards the reduction of the incidence of child labour. Despite of fact that engagement of children in any kind economic activities is legally banned in Pakistan, but due to lack of enforcement of laws and poor institution support. Similarly, an improvement in the quality of existing institutions can potentially contributes in the reduction of child labour. However, the positive and significant sing of the coefficient of young dependency (YD) suggests that higher dependency of young children is increasing the incidence of child labour in Pakistan. The overall findings suggest that in short run the determinants such as GDP, Scholl enrolments, dependency, and institutional quality have similar impact on child labour, the impact of growth in per capita income is more apparent in the reduction of child labour. The findings of this paper is suggesting that merely economic growth is not sufficient enough to reduce the extent of child labour in Pakistan, we have to align such efforts with policies aiming to achieve demographic and gender empowerment.

 

2- Political Institutions and Economic Growth: A Case Study of Selected South Asian Nations
by Noman Ahmad and Muhammad Tariq Majeed

Abstract

This study contributes to the empirical literature on regional economic performance by analyzing the role of political institutions in explaining economic growth of selected South Asian economies. The empirical analysis is based on panel co-integration techniques and the model used is an extended version of Solow-type model including an additional variable of human capital. The empirical findings broadly suggest that political institutions have critical role in explaining economic performance of the region as they significantly impede regional growth at lower levels. Nevertheless, political institutions significantly promote regional growth at higher levels. Thus, it is high quality of political institutions which can ensure long-run regional performance. This finding remains robust to different specifications and additional controls.

3- Why Children Study, Work or stay Idle? Some Evidence from Rural Pakistan
by Muhammad Jehangir Khan, Karim Khan, and Saima Nazeer

Abstract

In this study, we examine what does determine the decisions of children regarding schooling, work, and idleness in rural areas of Pakistan. In particular, we are interested in looking at the effect of children’s illness/disability on parental time allocation decisions with regard to their children. While using Pakistan Rural Households Panel Survey (PRHPS) (2012), we employ the Multinomial Logit Model in order to find the determinants of children’s activities. We find that child health is an important determinant of child time allocation. Children’s previous education and age, parental education, land ownership enhance child schooling and discourages child work/idleness. With regard to child work, especially of girls, is significantly lower in households having educated mothers. Likewise, child disability and illness result in a decline in the likelihood for children to go to school or work. Alternatively, child disability and illness result in an increase in the likelihood of children idleness. In this regard, girls are more affected.

4- Fiscal Decentralization and Economic Growth
by Iftikhar Ahmad

Abstract

The paper discusses the impact of fiscal decentralisation on economic growth to have an in-depth analysis of different policies that are in practice for decentralisation. This study makes it obvious that mere decentralisation is not enough; the equally important matter is how to decentralise? In this context, the empirical evidence suggests that fiscal decentralisation can impact economic growth in the long run only when provinces are allowed and incentivised for higher own source revenue generation. On the other hand, higher federal transfer (another important source of fiscal decentralisation) only had short run implications for the economic growth in the case of Pakistan. This finding should attract policy makers’ attention while assessing the NFC awards in Pakistan.  

5- Sources of Volatility in Stock and Currency Markets: A Panel Data Analysis of European Countries by Muhammad Jamil

Abstract

Volatility in financial markets is a highly explored area of research for the last few decades. Possible reasons for high concentration on the markets are its unexplained and unexplored sources. The present study aims to check certain macroeconomic variables as determinants of financial markets (stock market and exchange rate) volatility. It also aims to analyzethe contribution of thevolatility of one financial market to the volatility of another financial market before and after the financial crises. The analysis is conducted using two types of data sets from 27 European countries. The study employed AR(k)-EGARCH(p,q) models to measure volatility in financial markets. The study finds no significant interlink effects among volatilities of stock market returns and volatility of exchange rate returns after the financial crises. However, the increase in volatility in one market causedan increase in the volatility of the other market before the financial crises. Further, results also revealed that macroeconomic variables affect volatilities in these markets differently before and after the financial crises. The study recommends that the macroeconomic policies for stability in these markets cannot coincide as they differ in their impacts in different markets.

6- Institutional Governance and Climate Change Nexus: A Panel Data Analysis
by Ahmad Nawaz, Muhammad Tariq Majeed and Hafiz Muhammad Abubakar Siddique

Abstract

This study presents the insightful and comprehensive empirical evidence on impact of income and institutional governance on climate change based on panel data of 203 countries for time series of 1996 to 2017. We have divided the countries into sub-samples of 34 low income, 101 middle income and 68 high income countries by following the World Bank country classification. Econometric analysis is carried out by employing fixed effect model in order to incorporate the unobserved heterogeneity among countries, and instrumental variable technique generalized method of moments is applied to tackle with issue of endogeneity. Major contribution of this study involves providing the new empirical evidence on non-linear impact of institutional governance on CO2 emissions (proxy of climate change) and conditional impact of income and institutional governance on these emissions. Findings of the present study indicate that there is robust inverted-U shape relationship between institutional governance and CO2 emissions in all income groups of countries. We have termed this curve as Environmental Governance Curve (EGC).

7- Measurement of Living Standards Deprivation in Lahore (A Periodical Comparison Approach)
by Muhammad Afzal and Ahsan Nazir

Abstract

The study assesses living standards deprivation by determining absolute and relative contribution of each indicator of MPI in overall poverty for the periods 2011 and 2014 by using MICS data and Alkire-Foster method in Lahore Division of Punjab-Pakistan. The value of MPI shows decline in overall poverty level in Lahore Division in 2014 as compared to 2011. District Kasur is found to have more value of MPI than that of other districts of Lahore Division. The living standards of the people residing in rural areas of Lahore Division is found to be quite low than that of residing in urban areas. Different standings of poverty level is found in all Districts of Lahore Division. Resource allocation according to the bands of poverty of each district is suggested. This study also recommends improvement in education through raising adult literacy rate to tackle multidimensional poverty in Lahore Division.

8- Impact of Concentrated Ownership on Firm Growth: Empirical Evidence from Manufacturing Sector of Pakistan
by Ayesha Rehan, Attiya Yasmeen Javaid and Mohammad Umar

Abstract

Present study is an attempt to investigate the impact of concentrated ownership on the growth of the manufacturing firms listed at Pakistan Stock Exchange for the data 2006-2016. A number of panel data estimation techniques are employed; all confirm the positive alignment effect of concentrated ownership on firm growth in line with Agency Theory and Penrose Theory of Firm Growth. In addition to this a number of firm specific factors are also found to have significant impact on the firm growth. Moreover the study provides practical implication for investors and policy makers in understanding the role of concentrated ownership on firm growth.

9- Effectiveness of Monetary Transmission and the Impact of Inflation Targeting Strategy: Evidence from Emerging Market Economies
by Zia Abbas, Syed Faizan Iftikhar and Shaista Alam

Abstract

The objective of this paper is to investigate the impact of inflation targeting strategy on monetary policy transmission mechanism by estimating the impact of deposit rate on consumption to GDP ratio in emerging market economies. The study considers sixteen years annual data from 2001 to 2016 comprises of thirty six emerging market economies (EMEs) including 16 inflation targeting and 20 non-inflation targeting countries. This study implies Generalized Method of Moments (GMM) for empirical investigation. The evaluation of transmission mechanism in the presence of inflation targeting strategy by estimating the impact of rate of interest on one of the significant component of aggregate demand i.e. house hold consumption instead of output is the major contribution of this research. The study found a significant impact of inflation targeting on monetary policy transmission mechanism.

10- Measurement of Living Standards Deprivation in Lahore (A Periodical Comparison Approach)
by Dr. Muhammad Afzal

Abstract

The study assesses living standards deprivation by determining absolute and relative contribution of each indicator of MPI in overall poverty for the periods 2011 and 2014 by using MICS data and Alkire-Foster method in Lahore Division of Punjab-Pakistan. The value of MPI shows decline in overall poverty level in Lahore Division in 2014 as compared to 2011. District Kasur is found to have more value of MPI than that of other districts of Lahore Division. The living standards of the people residing in rural areas of Lahore Division is found to be quite low than that of residing in urban areas. Different standings of poverty level is found in all Districts of Lahore Division. Resource allocation according to the bands of poverty of each district is suggested. This study also recommends improvement in education through raising adult literacy rate to tackle multidimensional poverty in Lahore Division.

11- Women Empowerment and Infant Mortality in Pakistan: Micro Data Evidence
by Maryam Bibi, Faiza Azhar Khan and Iffat Irshad

Abstract

Women empowerment has its significance for the economic and social development of countries; specifically, women empowerment is rendered important for the child health. Child health being part of sustainable development goals 2030 can be traced through reduced infant and child mortality rates. Owing to the importance of women empowerment for the infant mortality, the present study is an attempt to analyze the impact of women empowerment on infant mortality in Pakistan, utilizing the data from Demographic and Health Survey (DHS-VI) of United States Agency for International Development(USAID). The sample consists of 24,201 individuals. Principal Component Analysis (PCA) has been employed to measure the women empowerment using education level, employment status, asset holdings and decision making power. Besides women empowerment, other socio-economic, demographic and biological variables have been included as regressors. Logit model has been employed for the estimation of the determinants of the infant mortality. The results show that women empowerment significantly reduces the infant mortality. The study recommends that policy makers ought to introduce broad socio-economic interventions aiming at the wellbeing of both women and their infants.

12- Industrial sector and global oil price fluctuations: A case study of Pakistan
by Dr. Bushra Yasmin

Abstract

This study empirically investigates the dynamic relationship between global oil price fluctuations and industrial sector in Pakistan for the time period 1974-2015 employing an Autoregressive Distributed Lag Model. The findings suggest that industrial sector is prone to the global oil price fluctuations where observed and forecasted oil price volatility along with the net oil price increase relative to preceding three years has negatively significant effect on industrial value added share in GDP. Moreover, the oil price shock driven by the global demand has positive while the oil market-specific shock geared by precautionary increase in oil demand has negative effect on industrial value added, in the long run. Overall, uncertain oil price fluctuations and endogenously determined nature of oil price increase has dominant effect on the industrial sector in Pakistan than the annual oil price changes. The findings suggests domestic price stability along with move towards export diversification to form a strong industrial base rendering international oil price fluctuations impartial, on the one hand and for reaping the potential benefits of devaluation of domestic currency, on the other. However, improved energy efficiency and low oil dependency in the long run will be required to stimulate the industrial sector’s contribution in GDP.

13- Analysis of Agricultural Production in Pakistan: A Study Based on Asymmetric Role of Inputs
by Naveed Iqbal, Dr. Maqbool H. Sial and Adeel Saleem

Abstract

Agricultural inputs are peculiar in nature as an asymmetry in their roles can be identified during the production process. These inputs can be grouped into a set of growth inputs or a set of facilitating inputs. The inputs affecting biological or physiological growth from the inside of the plant are called growth inputs e.g., water, nutrients, seed, and soil. The inputs that affect plant growth indirectly, such that they regulate the role played by growth inputs from outer environments of plants e.g., pesticides, capital, and labor are facilitating inputs. This concept of asymmetry, based upon agronomic principals of crop production, is incorporated in agricultural economics by Zhengfei, Oude Lansink, van Ittersum, and Wossink (2006). This variant role of inputs is studied by using farm household level data. In Pakistan, this study is one of the first studies that employ a double bootstrap methodology for two-stage analysis in a semiparametric way. It is reported that pesticides, family labor, and pesticides enhance Technical Efficiency (TE) of growth inputs. However, hired labor affects it negatively. The study also shows the effect of farm size on productivity.