Technological Absorption Hypothesis and Productivity Growth in Pakistan Manufacturing Sector
This research focuses on determining factors that influence the growth of technological progress in Pakistan's manufacturing sector. The Solow residual, which measures technological change, has been calculated using a growth accounting framework. Additionally, it evaluates the extent of Total Factor Productivity (TFP) in relation to macroeconomic variables, including technology transfer, the financial sector, human capital, development expenditure, and trade openness. The empirical model finding indicates that two key elements investing in human capital and enhancing employee skills alongside effective skill matching are crucial for boosting manufacturing growth. Furthermore, the empirical model suggests, other significant factors that support TFP, such as trade openness, financial development, and increased development expenditure, which align with the Keynesian view that development expenditure is essential for economic advancement. This paper emphasizes the importance of targeted investment in human and technological capital, alongside appropriate macroeconomic policies, to enhance manufacturing productivity in Pakistan.
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TFP, Solow Residual, Human Capital, Foreign Direct Investment, Transfer of Technology, ARDL Model, Error Correction Model.
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(1) Muhammad Tufail
Lecturer, Department of Economics, National University of Modern Languages (NUML), Islamabad, Pakistan.
(2) Junaid Ali
Lecturer, Department of Economics, Government Polytechnic Institute, Lower Dir, KP, Pakistan.
(3) Hidayat Ullah Khan
Associate Professor, Department of Economics, National University of Modern Languages (NUML), Islamabad, Pakistan.
Cite this article
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APA : Tufail, M., Ali, J., & Khan, H. U. (2025). Technological Absorption Hypothesis and Productivity Growth in Pakistan Manufacturing Sector. Global Management Sciences Review, X(I), 27-40. https://doi.org/10.31703/gmsr.2025(X-I).03
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CHICAGO : Tufail, Muhammad, Junaid Ali, and Hidayat Ullah Khan. 2025. "Technological Absorption Hypothesis and Productivity Growth in Pakistan Manufacturing Sector." Global Management Sciences Review, X (I): 27-40 doi: 10.31703/gmsr.2025(X-I).03
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HARVARD : TUFAIL, M., ALI, J. & KHAN, H. U. 2025. Technological Absorption Hypothesis and Productivity Growth in Pakistan Manufacturing Sector. Global Management Sciences Review, X, 27-40.
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MHRA : Tufail, Muhammad, Junaid Ali, and Hidayat Ullah Khan. 2025. "Technological Absorption Hypothesis and Productivity Growth in Pakistan Manufacturing Sector." Global Management Sciences Review, X: 27-40
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MLA : Tufail, Muhammad, Junaid Ali, and Hidayat Ullah Khan. "Technological Absorption Hypothesis and Productivity Growth in Pakistan Manufacturing Sector." Global Management Sciences Review, X.I (2025): 27-40 Print.
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OXFORD : Tufail, Muhammad, Ali, Junaid, and Khan, Hidayat Ullah (2025), "Technological Absorption Hypothesis and Productivity Growth in Pakistan Manufacturing Sector", Global Management Sciences Review, X (I), 27-40
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TURABIAN : Tufail, Muhammad, Junaid Ali, and Hidayat Ullah Khan. "Technological Absorption Hypothesis and Productivity Growth in Pakistan Manufacturing Sector." Global Management Sciences Review X, no. I (2025): 27-40. https://doi.org/10.31703/gmsr.2025(X-I).03