IDEAS home Printed from https://ideas.repec.org/a/ani/irdjoe/v4y2022i1p25-37.html
   My bibliography  Save this article

Pakistan’s Global Trade Potential with Selected Trading Partners: A Gravity Model Approach Using Static and Dynamic Panel Data

Author

Listed:
  • Muhammad Siddique

    (Ph.D. Scholar, National College of Business Administration & Economics, Pakistan)

  • Muhammad Abdul Quddus

    (Professor, National College of Business Administration & Economics, Pakistan)

  • Asim Iqbal

    (Professor, Department of Economics & Business Administration, University of Education, Pakistan)

Abstract

This research study employs a gravity model to explore Pakistan's trade potential from 2000 to 2020. China, United Arab Emirates (UAE), Saudi Arabia (KSA), Kuwait, United States (USA), Malaysia, Japan, India, Singapore, Afghanistan, Iran, Spain, Germany, United Kingdom (UK) and Belgium are among our significant trading partners. The study uses both static and dynamic econometric techniques to capture the trade potential of Pakistan. The findings from both methodologies are comparable, indicating that economic size and distance have a significant effect on bilateral trade. Furthermore, throughout the research period, political globalization is determined to be considerable and has an important influence on the economic masses. These factors support the theoretical model(s) that Pakistan and Pakistan’s trading partners with economic integration, political globalization, and distance all depict a significant impact on trade relations.

Suggested Citation

  • Muhammad Siddique & Muhammad Abdul Quddus & Asim Iqbal, 2022. "Pakistan’s Global Trade Potential with Selected Trading Partners: A Gravity Model Approach Using Static and Dynamic Panel Data," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 4(1), pages 25-37, March.
    • Handle: RePEc:ani:irdjoe:v:4:y:2022:i:1:p:25-37
    DOI: 10.52131/joe.2022.0401.0058
    as

    Download full text from publisher

    File URL: https://journals.internationalrasd.org/index.php/joe/article/view/629/368
    Download Restriction: no
    File URL: https://journals.internationalrasd.org/index.php/joe/article/view/629
    Download Restriction: no
    File URL: https://libkey.io/10.52131/joe.2022.0401.0058?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Baier, Scott L. & Bergstrand, Jeffrey H., 2009. "Bonus vetus OLS: A simple method for approximating international trade-cost effects using the gravity equation," Journal of International Economics, Elsevier, vol. 77(1), pages 77-85, February.
    2. Minetti, Raoul & Zhu, Susan, 2018. "Are Banks Engines of Export? Financial Structures and Export Dynamics," Working Papers 2018-5, Michigan State University, Department of Economics.
    3. Maurel, Mathilde & Koukhartchouk, Oxana, 2003. "Accession to the WTO and EU Enlargement: What Potential for Trade Increase?," CEPR Discussion Papers 3944, C.E.P.R. Discussion Papers.
    4. Abdul Abiad & Prachi Mishra & Petia Topalova, 2014. "How Does Trade Evolve in the Aftermath of Financial Crises?," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 62(2), pages 213-247, June.
    5. Kabir, Mahfuz & Salim, Ruhul, 2010. "Can Gravity Model Explain BIMSTEC’s Trade?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 25, pages 144-166.
    6. John Thornton & Alessandro Goglio, 2002. "Regional bias and intra-regional trade in southeast Asia," Applied Economics Letters, Taylor & Francis Journals, vol. 9(4), pages 205-208.
    7. Bhattacharyya Ranajoy & Banerjee, Tathagata, 2006. "Does the Gravity Model Explain India Direction of Trade? A Panel Data Approach," IIMA Working Papers WP2006-09-01, Indian Institute of Management Ahmedabad, Research and Publication Department.
    8. James E. Anderson, 2011. "The Gravity Model," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 133-160, September.
    9. Barry Eichengreen & Douglas A. Irwin, 1998. "The Role of History in Bilateral Trade Flows," NBER Chapters, in: The Regionalization of the World Economy, pages 33-62, National Bureau of Economic Research, Inc.
    10. Muhammad Ullah & Kazuo Inaba, 2012. "Impact of RTA and PTA on Bangladesh’s Export: Application of a Gravity Model," Journal of Industry, Competition and Trade, Springer, vol. 12(4), pages 445-460, December.
    11. Yoke Fong Kong & Richard Kneller, 2016. "Measuring the Impact of China's Export Growth on its Asian Neighbours," The World Economy, Wiley Blackwell, vol. 39(2), pages 195-220, February.
    12. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    13. Horácio Faustino & Isabel Proença, 2011. "Effects of Immigration on Intra-Industry Trade: A logit analysis," Working Papers Department of Economics 2011/19, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    14. Leitão, Nuno Carlos & Tripathi, Sabyasachi, 2013. "Portuguese Trade and European Union: The Gravity Model," MPRA Paper 45994, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bakari, Sayef, 2023. "The nexus between domestic investment and economic growth in MENA countries; Does unemployment matter?," MPRA Paper 118349, University Library of Munich, Germany.
    2. Ritu SHEKHAWAT & C.R. BISHNOI, 2024. "India’s global trade potential. A panel gravity model approach," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(638), S), pages 75-94, Spring.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tripathi, Sabyasachi & Leitão, Nuno Carlos, 2013. "India’s Trade and Gravity Model: A Static and Dynamic Panel Data," MPRA Paper 45502, University Library of Munich, Germany.
    2. Leitão, Nuno Carlos & Tripathi, Sabyasachi, 2013. "Portuguese Trade and European Union: The Gravity Model," MPRA Paper 45994, University Library of Munich, Germany.
    3. Anderson, James E. & Yotov, Yoto V., 2020. "Short run gravity," Journal of International Economics, Elsevier, vol. 126(C).
    4. Moelders, Florian, 2011. "Trade Persistence and the Limits of Trade Agreements," Proceedings of the German Development Economics Conference, Berlin 2011 58, Verein für Socialpolitik, Research Committee Development Economics.
    5. Getachew Magnar Kitila & Fuzhong Chen, 2021. "Multilateral Trade Resistance, International Competitiveness and African International Exports: A Network Perspective," International Journal of Science and Business, IJSAB International, vol. 5(10), pages 111-126.
    6. Güzin Bayar, 2018. "Estimating export equations: a survey of the literature," Empirical Economics, Springer, vol. 54(2), pages 629-672, March.
    7. Chen, Natalie & Novy, Dennis, 2012. "On the measurement of trade costs: direct vs. indirect approaches to quantifying standards and technical regulations," World Trade Review, Cambridge University Press, vol. 11(3), pages 401-414, July.
    8. Head, Keith & Mayer, Thierry, 2014. "Gravity Equations: Workhorse,Toolkit, and Cookbook," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 131-195, Elsevier.
    9. Álvarez, Inmaculada C. & Barbero, Javier & Rodríguez-Pose, Andrés & Zofío, José L., 2018. "Does Institutional Quality Matter for Trade? Institutional Conditions in a Sectoral Trade Framework," World Development, Elsevier, vol. 103(C), pages 72-87.
    10. Zhang, Yahua & Findlay, Christopher, 2014. "Air transport policy and its impacts on passenger traffic and tourist flows," Journal of Air Transport Management, Elsevier, vol. 34(C), pages 42-48.
    11. Benjamin Jung, 2009. "Adjustment Dynamics of Bilateral Trade Flows: Theory and Evidence," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 145(IV), pages 421-442, December.
    12. Čipkutė Eivilė, 2016. "The Gravity Model for Assessing Trade Patterns: The Case of Baltic States," Ekonomika (Economics), Sciendo, vol. 95(3), pages 81-97, December.
    13. Vêlayoudom Marimoutou & Denis Peguin & Anne Peguin-Feissolle, 2009. "The "distance-varying" gravity model in international economics: is the distance an obstacle to trade?," Economics Bulletin, AccessEcon, vol. 29(2), pages 1139-1155.
    14. Juliana D. Araujo & Povilas Lastauskas & Chris Papageorgiou, 2017. "Evolution of Bilateral Capital Flows to Developing Countries at Intensive and Extensive Margins," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 49(7), pages 1517-1554, October.
    15. Michele Fratianni & Francesco Marchionne, 2012. "Trade Costs and Economic Development," Economic Geography, Taylor & Francis Journals, vol. 88(2), pages 137-163, April.
    16. Sithanonxay SUVANNAPHAKDY & Toshihisa TOYODA & Chris CZERKAWSKI, 2011. "Enhancing Trade Flows in ASEAN Plus Six," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 11(2).
    17. Francois, Joseph & Manchin, Miriam, 2013. "Institutions, Infrastructure, and Trade," World Development, Elsevier, vol. 46(C), pages 165-175.
    18. Baier, Scott L. & Bergstrand, Jeffrey H. & Feng, Michael, 2014. "Economic integration agreements and the margins of international trade," Journal of International Economics, Elsevier, vol. 93(2), pages 339-350.
    19. Povilas Lastauskas & Mariarosaria Comunale & Justas Dainauskas, 2021. "What Explains Excess Trade Persistence? A Theory of Habits in the Supply Chains," Bank of Lithuania Working Paper Series 85, Bank of Lithuania.
    20. Linh T.D. Huynh & Hien Thanh Hoang, 2019. "Effects of exchange rate volatility on bilateral import performance of Vietnam: A dynamic Generalised method of Moments panel approach," International Economic Journal, Taylor & Francis Journals, vol. 33(1), pages 88-110, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ani:irdjoe:v:4:y:2022:i:1:p:25-37. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Muhammad Abrar ul Haq (email available below). General contact details of provider: https://journals.internationalrasd.org/index.php/joe/index .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.