Abstract
The present research is on achieving elevated GDP growth rates in Pakistan: which sector is to lead? The intention of this study is to analyze the contribution of major sectors i-e agriculture, industry and services, towards overall GDP growth of Pakistan. Time series data ranging 1951 to 2014 were obtained from the State Bank of Pakistan. E-views, Excel, Statistics and Minitab packages were used. Stationary analysis was made by applying Augmented Dickey- Fuller and Philips-Perron unit root tests. The data was found stationary and OLS estimation technique was applied on unstandardized and standardized variables The analysis on unstadardized variables depicted that the services sector is significant with β3= 0.46 (p-value 0.0000), agriculture sector with β1=0.31 (p-value 0.0000) and industrial sector with β2=0.23 (p-value 0.0000).All the predictors were found statistically significant at the 5 percent level of significance. ANOVA technique was applied to test the overall significance of the model and found significant with P=0.000. The estimated coefficients of standardized variables indicated that the (standardized) services sector is significant with β3=0.54285 (p-value 0.0000,se=0.03312) and indicates that if (standardized) services sector increases by one standard deviation, on average, the (standardized) GDP will increase by 0.54 standard deviations. The (standardized) agriculture sector with β1= 0.47247 (p-value 0.0000, se=02835) indicates that if (standardized) agriculture sector increases with one standard deviation, on average, the (standardized) GDP will increase by 0.47 standard deviations. The (standardized) industrial sector with β2= 0.37123 (p-value 0.0000, se=03230) indicates that if industry increases by one standard deviation, on average, the (standardized) GDP will increase by 0.37 standard deviations. No multicollinearity, autocorrelation and heteroscedasticity were found. The models were found stable by applying model stability tests (CUSUM).