Abstract

This study aims to investigate the impact of trade openness on the real agricultural sector growth in case of Pakistan, by using the data from 1971 to 2009. We employ Ng- Perron unit root test in order to determine the order of integration, autoregressive distributed lag model for long run association and modified Granger causality test to determine the short run and long run causal direction. The results indicate positive long run relationship between trade openness and real agricultural growth. The Granger causality test results confirm the long run causal direction from trade openness, human capital, and physical capital to real agricultural sector gross domestic product (GDP).

Key words: Trade openness, human capital, agricultural sector growth.