Abstract
This study focuses on determining the significance of the imported resource content, the largest consumer of the foreign exchange earnings, relative to the domestic inputs in the large scale-manufacturing sector (LSMS) of Pakistan. The analysis also includes the causal relationship of the major manufacturing sector variables; namely manufacturing employment, investment, and exports, with the economic growth of the country, determined within a unidirectional model. The relative significance of -the domestic and imported resource content in the LSMS is determined for thirty 3-digit level industries over a period of 12 year~~ 1975-1991. The results are obtained by estimating a simultaneous equations model, i.e., applying the 3SLS technique. The findings suggest that the domestic resource content has played a significant role in determining both the output and employment in the .LSMS of Pakistan, but the estimated coefficients oithe imported resource content variable indicate the absence of a significant relationship with the left hand side variables, LSMS output and employment, respectively.
