ANALYZING THE IMPACT OF FINANCIAL MARKET ON ECONOMIC GROWTH: EVIDENCE FROM PAKISTAN

The current study was designed with the purpose to measure the impact of financial market on Pakistan's economic growth taking into consideration the time series data ranging from 1980 to 2018. Variable used in this study are financial development, banking sector development, foreign direct investment, and the secondary school enrollment. This study describes three independent and one dependent variable, secondary school enrolment has been used as control variable. The statistical tools implied for the measurement of variables and deduct results were correlation analysis, Unit root, ADF, co-integration test, ordinary least square regression. Vector Error correction model has been used to check the long run relationships among the studied variables. This study concludes that financial development and banking sector credithas significant and positive impact on economic growth. The foreign direct investment insignificant impact (in short run) on economic growth of Pakistan. The study also present implications for policy makers as well as future researchers.