Abstract

Productivity measurement, impacts of technology spillovers and trend towards indigenous R&D is seriously lacking in manufacturing sector of Pakistan. There are very few studies carried out in this development sensitive area. This research was conducted to see the impacts of technology spillovers on total productivity of manufacturing sector in Pakistan. Furthermore, it was intended to check the effects of increase in capital stocks, labor employed, collaboration with academia, and technology transfer on the total productivity and technology spillovers. This study was carried out with the help of data provided by Federal Bureau of Statistics (FBS), Economic Surveys (ES), State Bank of Pakistan (SBP), Ministry of Industries and Production (MIP) and Planning Commission (PC) of the manufacturing sector of Pakistan and consisted of all major industrial groups including food, tobacco, textile, chemical, cement, fertilizers, automobile, electrical machinery and materials. The data was analyzed using descriptive statistics, correlation, regression and reliability tests on SPSS-17. The results showed that textile sector, although largest manufacturing sector, is least productive, while tobacco sector is most productive sector. Automobile, petroleum and machinery and equipment manufacturing sector are other potential sectors. Furthermore, the study realized the presence of both horizontal and vertical spillovers in all sectors with varying intensities and their positive effect on productivity. This study faced several limitations in the availability of data related to statistics of material inputs, employed labor and R&D investment.

Key words: Technology spillovers, foreign direct investment (FDI), productivity, performance management, horizontal spillovers, vertical spillovers, technology gap, economic growth.