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Estimation of import and export demand functions using bilateral trade data: The case of Pakistan

Author

Listed:
  • Jahanzaib Haider

    (Department of Management Sciences COMSATS Institute of Information Technology, Pakistan.)

  • Muhammad Afzal

    (Department of Management Sciences COMSATS Institute of Information Technology, Pakistan.)

  • Farah Riaz

    (Department of Management Sciences COMSATS Institute of Information Technology, Pakistan.)

Abstract

We estimated the import and export elasticities of Pakistan trade with traditional trade partners and some Asian countries to see the dynamics of Pakistan trade from 1973 to 2008. OLS results suggest that income is the principal determinant of exports and imports. Pakistan exports are cointegrated with Japan and USA while the imports are cointegrated with UAE and USA. Pakistan imports and exports are cointegrated with Bangladesh and Sri Lanka but not with India and China. Income and exchange rate are both important determinants of foreign trade. Continuing its trade with traditional partners and making efforts for greater market access to USA and EU, Pakistan should make efforts to increase its trade with Asian countries notably China and India because both are fast growing economies and have huge market.

Suggested Citation

  • Jahanzaib Haider & Muhammad Afzal & Farah Riaz, 2011. "Estimation of import and export demand functions using bilateral trade data: The case of Pakistan," Business and Economic Horizons (BEH), Prague Development Center, vol. 6(3), pages 40-53, September.
    • Handle: RePEc:pdc:jrnbeh:v:6:y:2011:i:3:p:40-53
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    Citations

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    Cited by:

    1. Alex Ijjo & Isaac Shinyekwa, 2016. "Foreign Aid and Trade Capacity Development Recent Evidence from Uganda," Journal of Sustainable Development, Canadian Center of Science and Education, vol. 9(3), pages 1-39, April.
    2. Muhammad Afzal & Sheikh Shoaib Ahmed & Muhammad Waseem Shahzad, 2019. "Impact of Merchandize and Services Trade on Economic Growth of Pakistan," Journal of Contemporary Research in Business, Economics and Finance, Michael Laurence, vol. 1(2), pages 30-36.
    3. Júlio Vicente Cateia & Clailton Ataídes de Freitas & Paulo Ricardo Feistel, 2021. "Determinants of Cashew Nut Exports of Guinea-Bissau," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 13(9), pages 117-117, August.
    4. Khyati Kathuria & Nand Kumar, 2021. "An Empirical Investigation of the Disaggregated Import Demand Function: Non-linear ARDL Framework," Foreign Trade Review, , vol. 56(2), pages 197-205, May.

    More about this item

    Keywords

    Import and export elasticities; Pakistan; Asian countries; cointegration.;
    All these keywords.

    JEL classification:

    • F01 - International Economics - - General - - - Global Outlook
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

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