Determinants of Pakistan’s Exports: An Econometric Analysis (original) (raw)
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Sarhad Journal of Management Sciences, 2018
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The role of international trade in economic development is very important. International trade is a potential source to increase the world production of goods and services. All the trading nations get benefits of increased world production caused by international trade. The present study empirically analyzed the impact of exchange rate and economic growth along with some other important macroeconomic factors on exports performance of Pakistan by using time series data. The study applied the Augmented Dickey-Fuller (ADF) Unit Roots Test to check the stationarity of data series. Autoregressive distributed lag model is used to estimate the long run relationship among the variables, followed by Unrestricted Error Correction Model (UECM). Empirical results based on ARDL bound testing approach to co-integration show that there exist a long run equilibrium relationship between Pakistan exports performance and its factors. In this study; Exchange rate, gross domestic production and trade openness have positive and significant impact on export performance, whereas role of foreign direct investment in determination of exports performance of Pakistan seems to be insignificant according to our analysis. In the end, the estimates of labor force indicate the higher growth of labor force along with lack of skills leads to contribute adversely on export oriented sectors where skilled labor force is required.
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This study is an empirical investigation to Export led Growth hypothesis (1971-2016) in case of Pakistan by applying cointegration analysis and dynamic error correction mechanism. The study proves that the exports are important and significant determinant of economic growth in Pakistan. The analysis also reveals that the exports along with labor force, investment and Domestic credit to private sector ratio are important for the long-run as well as short run economic growth of Pakistan.
This research investigates the Empirical Analysis of Export Performance and its impact on Economy of Pakistan: A Time Series Analysis It is taken as proxy for share of investment in GDP. It is taken as %age of GDP. Data on real exports is taken in current 2005 US$. The trend and descriptive statistics of defense expenditures in Pakistan from1990-2015. It was revealed that Pakistan growth rate was 6.3% per annum while other low income countries grew at an average annual rate of 4% in 1980s. The share of exports in GDP increased to 13% in 1990s. This increase was due to different policies taken by Pakistan such as establishment of two export processing zones, rebates on different items, excise and sales tax rebates, and tax relief for exporters etc in mid 1980s. In 1988 Government of Pakistan has also launched macroeconomic Adjustment program to improve trade policy, fiscal policy and deregulation process.
Foreign Direct Investment Lead to Exports of Pakistan: An Econometric Evidence
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The objective of the study is to empirically analyze that whether foreign direct investment lead to exports of Pakistan for the period from 1972 to 2014. Econometric results are estimated using Partial Adjustment Model for long run as well short run and then some diagnostic statistics are also applied for reliability of results. Long run and short run results propose positive influence of foreign direct investment, exchange rate, trade openness, and real GDP of Pakistan while inflation is found to have inverse effect of exports of Pakistan. Further tests indicate regression model free from Autocorrelation, Heteroskedasticity, abnormality of residuals and dynamic instability problems. Keywords: Foreign Direct Investment, Real GDP, Exports, Exchange Rate, Inflation.
Causality between Exports and Economic Growth: Investigating Suitable Trade Policy for Pakistan
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This study investigates causal relationship between GDP and exports for the period of 1975 to 2010. The aim of this study is to check affectivity of export promotion policy adopted by Pakistan during 1990s. Johansen test of Cointegration and Granger Causality employed to determine short run and long run causality. The result of Cointegration reveals existence of one positive cointegrating equation. The result of Causality test show short run and long run causality run from GDP to exports. The result concludes that both in short and long run only growth in production cause exports growth. Government should attempt to develop production side, which in long run develop trade and economy.