Agglomerations, Urbanization and Economic Prosperity in Pakistan: A Demographic Analysis Using Ardl Approach for Time Series Data

Abstract

The current study aims to explore the relationship between agglomerations, urbanization and economic
prosperity in Pakistan. The empirical analysis is based on secondary dataset i.e. World Development Indicators
and Autoregressive Distribute Lag Model (ARDL) has been applied for the time period 1960-2016. The findings
depicts that in the long run agglomeration economies are contributing positively more to economic prosperity
compared to the share of overall urban population. However in the short run the effect of the latter variable is
found negative. All these results suggest that the governments should focus on policies specifically related to the
infrastructure building and the provision of basic services in the cities to improve the process of urbanization.
This is the only way to increase the agglomerations in the economy and its outcome in the form of generating
more economies of scale.