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The declining time path of the industrial share in GDP and employment has long been viewed as a natural outcome of the matured stages of development analogous to the radical decline in agricultural sector and a persistent move towards services sector. But the situation in country like Pakistan is not due to such structural transformation. Rather, the energy crises is expected to play a detrimental role in the growth of industrial sector. The volatility in power consumption by industrial sector and stagnant power generation not only hurts the industrial sector but also has devastating effects on the other interlinked sectors of the economy. This study endeavours to identify the role of power sector’s crises behind the industrial downfall in Pakistan and attempts to work out the extent to which this phenomenon may prevail in future. The attempt is made for Pakistan over a time span of 1970-2010. The Johansen Cointegration, Error Correction Model, Impulse Response Functions and Variance Decomposition techniques are applied to explore the short and long-run relationships among selected variables from the power sector. The uncertainty in industrial consumption of electricity and power generation are identified as major factors in undermining industrial growth whereas domestic consumption did not appear significantly volatile. For the future, power generation will remain the major contributing factor in shaping the time path of industrialisation in Pakistan.

This paper studies the technical efficiencies of the textile manufacturing industries in Pakistan using 5-digit level industry data. Technical efficiencies are computed by the Data Envelopment Analysis technique assuming constant as well as variable returns to scale. The efficiency scores thus obtained are analysed by the TOBIT regression technique to determine how input composition influences these efficiency scores. It is found that imported raw material and machinery exercises a positive effect, whereas non-industrial costs affect technical efficiencies in a negative way. Electricity does not play its due role in affecting technical efficiencies. JEL Classification: C24, D24, L6, O14 Keywords: Technical Efficiency, Data Envelopment Analysis, TOBIT Analysis, Manufacturing Industries

Traditionally, developed countries are the major exporters of services; however, technological developments in IT and communications over the last two decades have made it possible for developing countries to exploit their comparative advantage in some modern services. The driving force for this comparative advantage is the large pool of semi-skilled and skilled graduates in emerging countries who can deliver their services across borders, using advanced communication technologies. Why do emerging countries have increasing modern services exports? How are these exports explained by theory? What are the factors behind this export growth and the reasons to expect future growth? These are some of the important questions that researchers and policy-makers would like to find answers to and an attempt has been made to answer these questions in this paper. Identification of the sources of services export growth from emerging and developing countries can be attempted through established theories of goods trade and production. This paper reviews selected theory and empirical work in order to explain the underlying causes for growing exports of services. Causes for the export of modern services may include a comparative advantage of the exporting country, cost reduction for the importing firm through outsourcing, reduction in trading costs due to technological improvements and an increase in gains from services trade.

This study analysed the behaviour of a sample of manufacturing firms in Pakistan in order to understand what determines innovative activity employing a panel data set for the years 2002 and 2006-07. Probit estimation results reveal that size of the firm and human resource quality are important internal factors that increase the likelihood of a firm innovating. Interestingly, whether a firm is exporting or not has no bearing. However, post innovating there is a large increase in number of firms who export. Externally, presence in a geographic cluster is important though further analysis reveals that the impact varies according to firm size. Size per se does not increase likelihood of innovating for medium sized firm who only have an advantage over small sized firms when present in a cluster. Large firms on the other hand continue to have an advantage and the advantage further increases with presence in a cluster. Finally, analysis by product and process innovators reveals that the characteristics of firms undertaking the two types of innovative activity are similar. The only noteworthy difference being that process innovation does not benefit from presence of a firm in a cluster which might be attributable to the more visible nature of product innovation which benefits from technological spillovers that are a characteristic of presence in a cluster. JEL classifications: O14, O31, O33, L6 Keywords: Innovation and Invention: Processes and Incentive, Developing Countries, Industry Study

The last two decades have witnessed a remarkable spread of technology in all spheres of economic activity. The change has been so rapid that firms are finding it difficult to keep pace with ever-changing market situations. The issue of technology adoption is particularly relevant for export-oriented manufacturers who face tough competition in international markets and must maintain a competitive edge by adopting latest product and process technologies to meet the requirements of upscale global markets. It is generally believed that Pakistani firms have lagged behind their competitors in international markets in terms of technological advancement and consequently Pakistan’s exports continue to remain concentrated in low value-added and low quality product segments. However, the question of technology adoption by export-oriented manufacturers has received little attention in the empirical literature. This study is an attempt to explore the determinants of technology adoption by export-oriented manufacturing firms in Pakistan based on a survey of such firms in four major export categories including textiles and apparel, leather and leather products, agro-food processing and fisheries. According to Woodside and Biemens (2005), the term technology adoption refers to the decision-making process of an individual firm. 1 Technology adoption is a complex phenomenon and depends in large measure on firm characteristics and the economic environment under which the firms operate. This study focuses on firm characteristics that are believed to influence the probability of firms’ decisions whether to invest in technology or not. The data relating to technology adoption is seldom available in a developing country like Pakistan. However the survey conducted by Pakistan Institute of Development Economics in collaboration with United Nations Industrial Development Organisation (UNIDO) contains a binary response question 2 which has been used as a

Manufacturing is an important sector of Pakistan’s economy. The main focus of this paper is to analyse the major factors of value-added growth and productivity in the manufacturing sector by using Translog Production Technology over the period 1971-72 to 2004-05. The empirical findings show that the contribution of productivity and human capital is around one- third of the total value-added growth in manufacturing sector which is less than the contribution attributed to these factors in developed and many other developing countries. Conventional factors like capital and labour are still the mainstay in the value-added growth of Pakistan’s manufacturing sector. JEL classification: O1, O3, O4, O14, O15, O31 Keywords: Human Capital Spillovers, Total Factor Productivity, Absolute and Relative Shares

World is going to be global village due to the introduction of new and advanced technology and new innovations in technology make it more possible day by day. The widely spread economic activities both in real as well as in credit market is possible when they use advance technology to communicate. This is a fact that the world is rapidly moving towards an economic system based on the continuous and ubiquitous availability of information. Developing countries try to maintain and develop their technology in such a way that they can become a part of this global village. Recent developments in telecommunication technology have been an important tool to exchange the information to develop a sharp and valuable commodity market. During 21st century to move into post-industrial, information based economic growth, countries and sector try to equip themselves with the necessary telecommunication system. A modern telecommunication infrastructure is not only important for economic growth but also to connect domestic market of commodities as well as credit with international commodity and financial markets. This would develop the smooth flow of foreign investment, positive value of net exports, increase the value addition in GDP of an economy etc. Once the industrial and agriculture development was considered to be a best tool to enhance economic growth of a country, every country gave more importance to these sectors in its plans and policies, but now the trend has changed because the advancement and development of these two major sector of an economy sustain on the development of other factors, the role of service sector, advancement in technology, and the contribution of foreign sector in economic growth by different ways increases, and the major area of interest for foreign sector or investment was service sector and still it is, countries with the existence of GATS, started to privatise their set up, and after realising the importance of communications, the telecommunication sector is now on their main priorities. With the advancement of telecommunication services, a new market mechanism, low cost structure and expanded value chain of firms is possible [Kambil and Short (1994)], on other hand in developing countries, the average price of agricultural commodities is high in the area where there is telephone facilities available than the area where there is no facilities to communicate [Bayes, et al. (1999)].

This paper examines the efficiency of the large-scale manufacturing sector of Pakistan using parametric as well as non-parametric frontier techniques. Production frontiers are estimated for two periods─1995-96 and 2000-01─for 101 industries at the 5-digit PSIC. The results show that there has been some improvement in the efficiency of the large-scale manufacturing sector, though the magnitude of improvement remains small. The results are mixed at the disaggregated level: whereas a majority of industrial groups have gained in terms of technical efficiency, some industries have shown deterioration in their efficiency levels. The results from both the approaches are consistent, and in line with similar studies.