Abstract
Structure of the economy changes over a time. Fixed parameter
approaches do not consider impact of structural changes on
constancy of estimated parameters. The study addresses the
weaknesses of non-varying parametric techniques and uses non
fixed parametric technique to examine association between sectoral
growth and their determining factors. The findings reveal that
capital formation, foreign remittances, and permanent crop land
reduce agricultural sector growth while gross national expenditures
results in growth of the sector. The significant factors that affect
industrial growth are external debt, foreign direct investment and
gross national expenditures. Above mentioned determinants are
positively associated with the industrial sector growth in Pakistan.
Services sector growth is determined by consumer price index, gross
national expenditures and foreign direct investment. The foreign
direct investment and gross national expenditures cause services
sector growth while consumer price index retard it. While
considering findings, the concerned authorities should control
growth retarding factors and augment the factors that increase
sectoral growth of the country.
