Contribution of Private Sector Investment in Large-Scale Manufacturing Sector of Pakistan

Abstract

This study has tried to determine the contribution of private sector investment in large-scale manufacturing sector of Pakistan using time-series data for the period of 1981-2010. The OLS technique is used for the regression analysis and the results shows that private sector investment plays a significant role in manufacturing sector of Pakistan. All the variables have true expected sign showing significant affect on manufacturing sector in Pakistan. The study recommends that the government should create a sufficient demand by increasing domestic purchasing power, by export expansion, by import substitutions through assets redistribution. But all these policies may be difficult to implement in that, they have other impacts on the domestic economy. Export expansion and import substitution may be quite desirable for increasing demand. Government should take into consideration not only the conditions in domestic economy but also the international economy and finally the assets redistribution may be difficult politically.