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Title A Blue Economy and Accounting for Economic Growth: A Comparative Study of Pakistan and India

Author(s) Ms. Ayesha Saba

Abstract Blue economy is an emerging pillar of modern and sustainable economy. Present study is an attempt to empirically examine the impact of the blue economy on the economic growth of Pakistan and India because the quantification of the blue economy is a key component of the current study. The ongoing study is a time series analysis from the period 1980 to 2018. This quantitative analysis is used to evaluate how much economic growth may be predicted from shifting economic activity to the blue economy. So, a multidimensional blue economy index is constructed for this purpose. Twelve proxy variables constitute the six pillars of BE for each country. After tackling the measurement issues of blue economy, an amended form of neo-classical production function is used for econometric model in this research which introduced the blue economy as an engine of growth to solve the growth puzzle. Other variables gross fixed capital formation (GFCF), total labor force (TLF) and blue economy (BE) are selected as independent variables while GDP as a dependent variable. After checking the unit root or order of integration of all variables with the help of Augmented Dickey-Fuller Test and Philip-Perron unit root tests, study estimates the neoclassical production function with the help of autoregressive distributed lag (ARDL) model. The findings highlight the fact that there is a statistically significant impact of BE, GFCF and TLF on economic growth of Pakistan in the long run. However, in the short run BE and TLF has a positive but insignificant impact on GDP. In case of India, GFCF, TLF and BE positively and significantly influence the economic growth in the long run. However, in the short run TLF are positively but statistically insignificant. Study finds natural resource (blue economy) as a blessing for both economies in the long run. It means BE is an engine of growth. By comparing the results of both countries in growth accounting framework, share of growth due to capital, labor, blue economy and total factor productivity increase the economic growth of India more than that of Pakistan. 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. Key words: Gross Domestic Product (GDP), Blue Economy (BE), Total Factor Productivity (TFP), Growth Accounting (GA)

Type Thesis/Dissertation

Faculty Management Sciences

Department Economics

Language English

Publication Date 2022-12-22

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