Impact of Energy Prices, Consumption, and Government Effectiveness on Manufacturing Output: Evidence from Pakistan

Abstract

This study investigates the impacts of energy price, consumption, and government effectiveness on the yields of the manufacturing sector of Pakistan. The data is taken from 1998 to 2023. The Unit root and ADRL bound testing are used to estimate short and long run impacts of energy prices, consumption, and government effectiveness on manufacturing output along the control variables; growth domestic product growth, trade, raw material prices, foreign direct investment, covid-19 dummy. The results concluded that the foreign direct investment, gross domestic product growth, trade, energy consumption, and government effectiveness have a positive relationship with manufacturing output. While the raw material price, trade, energy prices, and COVID-19 dummy have negative associations with manufacturing output. In light of the high energy prices, energy consumption, and government effectiveness this study provides the policy suggestions based on finding that can be useful for the growth of the manufactured sector performance.