Abstract

The present study attempts to analyze the impact of trade liberalization and human capital on industrial performance in case of Pakistan. By using annual time series data of 1972-2014, study identifies the relationship between trade liberalization and industrial value-added, by applying co-integration technique. Findings of the analysis suggest that there exists positive long-run relationship between trade liberalization, human capital and industrial value-added in the economy. Industrial value-added is found to be highly elastic to human capital. Moreover, the results show that labor force and physical capital also have strong positive impact on industrial value-added. Our findings support the liberal trade policy for long-run growth of Pakistan economy.