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

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  • Jahangir Khan Achakzai

    (Balochistan University, Quetta.)

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    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.

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    File URL: http://www.pide.org.pk/pdf/PDR/2006/Volume3/425-437.pdf
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    Bibliographic Info

    Article provided by Pakistan Institute of Development Economics in its journal The Pakistan Development Review.

    Volume (Year): 45 (2006)
    Issue (Month): 3 ()
    Pages: 425-437

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    Handle: RePEc:pid:journl:v:45:y:2006:i:3:p:425-437

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    Related research

    Keywords: International Trade; Pakistan’s Trade; Gravity Model;

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    1. Richard Baldwin, 1993. "A Domino Theory of Regionalism," NBER Working Papers 4465, National Bureau of Economic Research, Inc.
    2. 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 549-56, November.
    3. 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 474-81, August.
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