The Impact of Sectoral Investment on the Output of Different Sectors of Paksitan's Economy

The objective of the study is to examine the role of sectoral investment (investment in agriculture, transportation, construction & mining) on sectoral output (agriculture, industrial and services sectors output) of Pakistan. Time series data for the period 1972 to 2016 was used to examine the impact of sectoral investment on the output of these three sectors. The data was collected from databases of State bank of Pakistan, World Development Indicator, Pakistan economic survey and fifty years of statistics of Pakistan Economy. We used Solow growth model as theoretical base to measure the impact of labour and capital on sectoral output. Auto Regressive and Distributed Lag (ARDL) model and ADF and bound tests are utilized to check stationarity and long run relationship between variables. Our results show that labour and capital investment have positive and significant effect on agriculture, industrial and services sectors of Pakistan in the long run.