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Import Demand, Economic Development and Trade Liberalization in Pakistan: An Empirical Analysis

Author

Listed:
  • Muhammad Wasif Siddiqi

    (Visiting Professor, GCU, Lahore, Pakistan)

  • Amjad Ali

    (Ph.D Scholar, National College of Business Administration and Economics (NCBA&E), Lahore, Pakistan)

  • Muhammad Irfan Chani

    (Assistant Professor and HOD Economics, The University of Lahore, Pakpattan, Pakistan)

Abstract

This study empirically investigates the effects of trade liberalization and economic development on income and price elasticities of import demand in Pakistan. The data used for empirical analysis covers the period of 1972 to 2009. Johanson co-integration test is used to confirm the equilibrium relationship among the variables included in the study. The short run dynamics are estimated through Vector Error Correction Mechanism. The results indicate that trade liberalization in Pakistan positively influences income elasticity of import demand. Similarly, price elasticity of import demand in Pakistan is positively related to level of economic development in the country.

Suggested Citation

  • Muhammad Wasif Siddiqi & Amjad Ali & Muhammad Irfan Chani, 2014. "Import Demand, Economic Development and Trade Liberalization in Pakistan: An Empirical Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 3(2), pages 131-141, June.
    • Handle: RePEc:rfh:bbejor:v:3:y:2014:i:2:p:131-141
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    References listed on IDEAS

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    10. Amjad Ali & Muhammad Irfan Chani, 2013. "Disaggregated Import Demand Function: A Case Study of Pakistan," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 1(1), pages 1-14, January.
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