The role of small and medium enterprises and poverty in Pakistan: An empirical analysis

The role of Small and Medium Enterprises (SMEs) is very important in economic growth, employment generation and poverty alleviation. Annual time series data has been used to examine the impact of SMEs on poverty in Pakistan for the period between 1972 and 2007. Log-linear autoregressive model has be...

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Bibliographic Details
Published inTheoretical and applied economics Vol. XXI; no. 4; pp. 67 - 80
Main Authors Sharafat ALI, Humayun RASHID, Muhammad Aamir KHAN
Format Journal Article
LanguageEnglish
Published General Association of Economists from Romania 01.04.2014
Subjects
income inequality
population growth
poverty
small and medium enterprises
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ISSN1841-8678
1844-0029

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Summary:The role of Small and Medium Enterprises (SMEs) is very important in economic growth, employment generation and poverty alleviation. Annual time series data has been used to examine the impact of SMEs on poverty in Pakistan for the period between 1972 and 2007. Log-linear autoregressive model has been estimated by Ordinary Least Squares (OLS) method using one year previous value of HCR as explanatory variable. The results of the study confirm a strong and negative impact of small scale industries’ output on poverty levels in Pakistan. The economic policy makers must focus on the establishment of formal financial markets to overcome the financial constraints faced by the SME sector in Pakistan. Simplification of lending procedures, enforcement of credit rights, and reduction in credit costs would be helpful for the establishment of robust SME sector in Pakistan.
ISSN:1841-8678
1844-0029