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Title Role of Blue Economy on Economic Growth: An Empirical Analysis of Pakistan.

Author(s) Shagufta Azad

Abstract Pakistan is naturally blessed with great blue potentials but unfortunately these potentials are underutilized. The basic purpose of this study is to quantify the blue economy and then its impact on economic growth of Pakistan. The ongoing study is a time series analysis from 1972 to 2018. The crucial part of our study is quantification of blue economy. For this we construct multidimensional index of blue economy. It is ever first attempt in this regard and even in the context of Pakistan. For this, we opt 13 variables and five dimensions of blue economy. We assign equal weights to each variable in each dimension. After tackling the measurement issues of blue economy, we developed an amended form of neo-classical production function as our econometric model in which we introduced blue economy as an engine of growth to solve the growth puzzle. The other supporting independent variables are human capital, inflation, and foreign direct investment. Our dependent variable is GDP. After checking the unit root order of all variables with the help of ADF and PP unit root tests, we estimate the model through Johansen and Juselius co-integration method. We do so to estimate the long run impact of blue economy on economic growth of Pakistan. Hereafter, to check the dynamic stability of our model we estimate the VECM form of our model and also test the different diagnostics tests for our model. The results of the study show that blue economy, human capital and foreign direct investment has positive impact on economic growth in the long run while inflation is negatively related to economic growth. Study finds natural resource (blue economy) as a blessing for our economy in the long run and we can say that blue economy is an engine of growth. The study wraps up with the effective policy recommendations like sustainable coastal management, improved marine policy along with ports efficiency, tourism development and sound development of aquaculture industry to vitalize blue economy potentials successfully. The effective, intelligent and judicious use of water resources can prove to be marvelous for the economic growth of Pakistan. Key words: Gross Domestic Product (GDP), Blue Economy (BE), Human Capital (HC), Vector Error Correction Model (VECM), Sustainable Development Goals (SDGs).

Type Thesis/Dissertation

Faculty Management Sciences

Department Economics

Language English

Publication Date 2020-09-16

Subject Role of Blue Economy on Economic Growth: An Empirical Analysis of Pakistan

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