Measuring the Effects of Globalization on Public Purchasing with Mediating Role of Research and Development: Empirical Evidence from Pakistan

Abstract

While examining the effect of globalization on public purchasing, the role of research and development was neglected before. Globalization is concerned with growing inequality in most highly developed economies, but also with the gap found in the vast majority of emerging economies. In most emerging economies, technological and financial development has led to growing inequality, while its impact on developed economies has been mixed. Furthermore, our findings show that the effects of GDP, foreign direct investment and the supply of unskilled workers to the effects of technology, and the effects of globalization on the supply of skilled workers to the effects of financial growth and also acts as a transmission channel. This research also examines how much the globalization effects public purchasing when R&D plays a mediating role in Pakistan. Data was used from 2002 to 2018 by applying dynamic ARDL simulation model. The ARDL dynamic simulation model can calculate the true positive and negative corrections of independent variables and their effects on the dependent variable. The results of the ARDL dynamic simulation show that foreign direct investment, research and development, GDP and global economic indices have a positive effect on public procurement in Pakistan, while inflation and interest rates have a negative effect on public procurement in Pakistan. Based on the results of this study, policy outcomes are proposed for Pakistan.

      Keywords: globalization, foreign direct investment, GDP, R&D, ECGI, dynamic ARDL simulations