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Determinants of export growth at the extensive and intensive margins : evidence from product and firm-level data for Pakistan

Author

Listed:
  • Reis, Jose Guilherme
  • Taglioni, Daria

Abstract

As globalization progresses and investment is mobile, it is ever more important for policy makers to understand drivers of growth and exports at the micro-level: Which products are being produced and exported? Which firms populate the domestic economy? Are they successful in exporting? How are firms affected by exogenous shocks and policy intervention? Through the use of descriptive statistics and econometric analysis, this paper assesses the trade competitiveness of Pakistan using micro-data. The case of Pakistan is interesting since the country's recent trade policy has reverted to a protectionist path since the mid-2000s and trade performance is stagnating, as indicated by a decrease in its trade-to-gross domestic product ratio over the past decade and low levels of sophistication of exports. The main findings of the paper are the following. Like many other countries, Pakistan posts a high concentration of exports in the hands of a limited number of large exporters. The dominance of few exporters has increased over time and it seems associated with the changes in trade policy. Low rates of product innovation and experimentation and a low ability of the Pakistani export sector to enter into new higher growth sectors are other features emerging from the data. All in all, the mediocre performance seems to be associated with internal problems with trade-related incentives, business environment, and governance, in addition to the well-known external constraints.

Suggested Citation

  • Reis, Jose Guilherme & Taglioni, Daria, 2013. "Determinants of export growth at the extensive and intensive margins : evidence from product and firm-level data for Pakistan," Policy Research Working Paper Series 6341, The World Bank.
  • Handle: RePEc:wbk:wbrwps:6341
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    References listed on IDEAS

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    Cited by:

    1. Shaista Alam, 2015. "The Effect of Preferential Trade Agreements on Pakistan’s Export Performance," Discussion Papers 2015-10, University of Nottingham, CREDIT.
    2. Defever, F. & Riaño, A. & Varela, G., 2020. "Evaluating the Impact of Export Finance Support On Firm-level Export Performance: Evidence from Pakistan," Working Papers 20/14, Department of Economics, City University London.
    3. Salamat Ali, 2017. "Exchange Rate Effects on Agricultural Exports: Firm-level Evidence from Pakistan," Discussion Papers 2017-09, University of Nottingham, GEP.
    4. Marianne Matthee & Thomas Farole & Tasha Naughtin & Neil Rankin, 2016. "South African Exporters and the Global Crisis: Intensive Margin Shock, Extensive Margin Hangover," South African Journal of Economics, Economic Society of South Africa, vol. 84(2), pages 183-198, June.

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    Keywords

    Economic Theory&Research; Free Trade; Markets and Market Access; Debt Markets; Trade Policy;
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