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Import Determinants and Potential Markets of Pakistan: An Application of PPML Gravity Model

Author

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  • Wani Suadat Hussain

    (Centre of Centre Asian Studies, University of Kashmir Hazartbal Srinagar, India)

  • Mir M. Afzal

    (Centre of Centre Asian Studies, University of Kashmir Hazartbal Srinagar, India)

Abstract

The present study examines import determinants of Pakistan with the top 28 trade partners from 2002 to 2018. To achieve this objective, the augmented gravity model of trade has been applied by incorporating both time-variant and time-invariant variables. In addition, the analysis quantifies the impact of free trade agreements (FTA) signed by Pakistan with China and other trade partners. The results show that along with income and distance, FTA, common language, and common border plays an essential role in imports of Pakistan with its main trade partners. In addition to identifying trade determinants, the impact of adherence to a particular trade agreement was also examined. The results indicate that FTA signed by Pakistan with China and other trade partners has created trade opportunities for participating countries, highlighting the importance of trade liberalization for the long-run development of the country.

Suggested Citation

  • Wani Suadat Hussain & Mir M. Afzal, 2023. "Import Determinants and Potential Markets of Pakistan: An Application of PPML Gravity Model," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 33(1), pages 57-73, March.
    • Handle: RePEc:vrs:suvges:v:33:y:2023:i:1:p:57-73:n:4
    DOI: 10.2478/sues-2023-0003
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    1. Suadat Hussain Wani & Effat Yasmin, 2023. "India’s trade with South and Central Asia: an application of institution-based augmented gravity model," Future Business Journal, Springer, vol. 9(1), pages 1-12, December.

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    More about this item

    Keywords

    Import flow; trade agreements; gravity model; panel data; PPML;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General
    • F1 - International Economics - - Trade
    • F69 - International Economics - - Economic Impacts of Globalization - - - Other
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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