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Socioeconomic Determinants of Per Capita GDP Growth in Pakistan: An Econometric Analysis
Purpose: This study explores the socioeconomic factors influencing per capita GDP in Pakistan by employing an econometrics analysis technique and an ARDL bounds testing methodology. The main goal of this research is to explore and measure both long-term and short-term relationships between per capita GDP and selected socioeconomic indicators. Design/Methodology/Approach: The analysis incorporates the ADF unit root test, a correlation matrix, and the ARDL bounds test. The sample consists of annual data from 2002 to 2022. Findings: The long-term analysis indicates that GDP growth rate and control of corruption have a significant positive impact on per capita GDP. On the other hand, government effectiveness, industry, military expenditure, and total debt are found to have negative effects on per capita GDP. In the short term, changes in GDP growth rate, government effectiveness, and unemployment rate are shown to have immediate effects on per capita GDP. The error correction term suggests a significant speed of adjustment back to the longrun equilibrium after a shock. The finding highlighted the critical role of macroeconomic stability and institutional quality in fostering economic growth. Policies aimed at improving government effectiveness, reducing military expenditure, and managing total debt are essential for improving per capita GDP. Strict control over corruption and steady GDP growth are crucial for achieving long-term economic prosperity and sustainability. Originality: This study provides a comprehensive analysis of the socioeconomic determinants of per capita GDP in Pakistan. It highlights both short-term and long-term impacts of macroeconomic stability and institutional quality, offering insights that can guide policymakers in promoting sustainable economic growth.