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Intra-ECO Trade: A Potential Region for Pakistan’s Future Trade

Author

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  • Jahangir Khan Achakzai

    (Balochistan University, Quetta.)

Abstract

A standard gravity model was applied to estimate the magnitude of potential trade flows between Pakistan and the nine ECO member countries. The major issue in this analysis is to explore that Intra- ECO trade has great potential for Pakistan and that it got lower share than its potential. The results from the gravity model confirm that ECO has a positive and significant impact on intra-regional trade. It suggests that intra-regional trade is lower than what would be predicted by the gravity equation, suggesting greater scope for regional integration among the ECO member countries. This is especially the case between countries that have a common geographical border. The privilege of geography and the existence of trade preferences among ECO members could be expanded to cover potential trade to neighboring countries.

Suggested Citation

  • Jahangir Khan Achakzai, 2006. "Intra-ECO Trade: A Potential Region for Pakistan’s Future Trade," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(3), pages 425-437.
    • Handle: RePEc:pid:journl:v:45:y:2006:i:3:p:425-437
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    File URL: http://www.pide.org.pk/pdf/PDR/2006/Volume3/425-437.pdf
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    References listed on IDEAS

    as
    1. Bergstrand, Jeffrey H, 1985. "The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 474-481, August.
    2. Richard Baldwin, 1993. "A Domino Theory of Regionalism," NBER Working Papers 4465, National Bureau of Economic Research, Inc.
    3. Brada, Josef C & Mendez, Jose A, 1985. "Economic Integration among Developed, Developing and Centrally Planned Economies: A Comparative Analysis," The Review of Economics and Statistics, MIT Press, vol. 67(4), pages 549-556, November.
    4. World Bank, 2005. "World Development Indicators 2005," World Bank Publications - Books, The World Bank Group, number 12426.
    5. repec:wbk:wbpubs:12425 is not listed on IDEAS
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    Cited by:

    1. Amjad Naveed & Ghulam Shabbir & Shabib Haider Syed & Muhammad Ashfaq & Muhammad Ali Khan, 2022. "Can a path to peace promote export growth? Evidence from Pakistan and its trading partners," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(5), pages 3309-3324, October.
    2. Sultan, Maryam & Munir, Kashif, 2015. "Export, Import and Total Trade Potential of Pakistan: A Gravity Model Approach," MPRA Paper 66621, University Library of Munich, Germany.
    3. Salahuddin & Javed Iqbal & Misbah Nosheen, 2020. "Economic & Cultural Distance & Regional Integration: Evidence from Gravity Model Using Disaggregated Data for Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 59(2), pages 243-274.

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    More about this item

    Keywords

    International Trade; Pakistan’s Trade; Gravity Model;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration

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