Impact of Gwadar Port on the Economic Growth of Pakistan
Keywords:
Gwadar Port, GDP growth, FDI, Labor force participation, trade openness, tax revenue, Pakistan economy, OLS regressionAbstract
This research analyzes the impact of Gwadar Port on Pakistan's GDP, with particular emphasis on five key variables: foreign direct investment (FDI), labor participation, trade openness, tax collections, and environmental pressures. The study uses yearly time-series data from 2000 to 2025 and employs an Ordinary Least Squares (OLS) regression model. The findings show that all explanatory variables positively and significantly influence GDP per capita, with FDI and labor force participation as the most significant contributors. Trade openness also positively influences GDP, confirming classical trade theory, and tax revenues underscore Gwadar's taxing significance. The positive relationship between CO2 emissions and GDP aligns with the Environmental Kuznets Curve, suggesting that growth is currently associated with environmental costs. Diagnostic tests confirm the model's soundness, and descriptive statistics show stability in GDP and labor participation but instability in FDI and emissions. The results are consistent with Hirschman's linkage theory and Krugman's core–periphery model, revealing Gwadar's revolutionary role in re-making Pakistan's economic geography. The research concludes that Gwadar Port is both an opportunity and a burden: it can fuel Pakistan's development and regional trade integration, but inclusive and sustainable policies are required to address environmental and equity issues.
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Copyright (c) 2025 Ayesha Sohail
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