European Online Journal of Natural and Social Sciences 2019; www.european-science.com Vol.8, No 1 pp. 109-117 ISSN 1805-3602 Dynamics Shaking Total Factor Productivity in Manufacturing Sector of Pakistan: A Panel Data Analysis Samara Haroon, Dong Hui Zhang* School of Economics, Shandong University, Jinan, PR China *Email.
[email protected] Tel.: +8613708926062 Received for publication: 24 July 2018. Accepted for publication: 19 November 2018. Abstract This research article investigates how explanatory variables are responsible for change in to- tal factor productivity in manufacturing sector of Pakistan. Panel data of selected fifteen manufac- turing firms of Pakistan from 2005 to 2013 are used to capture time and space affects. Considering data set of fifteen selected manufacturing firms consistently, it was found that explanatory variables (like size of firm, leverage, cash flows and Ownership) were responsible for changed in TFP growth. Empirical results suggest that explanatory variables appear to be most dominating factors in order to influence the TFP growth over a period of time and over a firm also. Research study further will provide a guide for Pakistan policy makers to set priorities to improve TFP growth for their manu- facturing firms especially in Punjab. Keywords: Total Factor Productivity, Manufacturing Sector, Punjab, Pakistan Introduction TFP growth sets opportunity towards society to increase the welfare of people by increasing the production of manufacturing sector. Further productive efficiency plays an important role in economic planning and development. It is core objectives of any government to enhance the overall growth and development of the economy in order to enhance the GDP.