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Patterns of Export Diversification: Evidence from Pakistan

Author

Listed:
  • Hamna Ahmed

    (Research Fellow, Centre for Research in Economics and Business, Lahore School of Economics, and PhD candidate at the University of Kent, UK.)

  • Naved Hamid

    (Director, Centre for Research in Economics and Business, Lahore School of Economics)

Abstract

This paper examines historical trends in the diversification of exports in Pakistan, using the Hirschman index to quantify the degree of export diversification. We analyze the structure of exports through the lens of ‘traditionality,’ for which we construct industry-specific, average cumulative export experience functions, i.e., a traditionality index of all 2-digit export industries in Pakistan from 1972 to 2012. This is useful in distinguishing between traditional and nontraditional export industries. We also study the degree of structural change in the export sector since 1972 by recalculating the traditionality index based on five-year interval periods. The cross-industry variance of this index is then used to calculate the structural change index. Periods for which the index values are low are interpreted as periods during which the export industries experienced uniform patterns of export growth (and thereby no structural change). Periods for which the index values are high are interpreted as periods during which the export industries experienced varied patterns of growth, thus undergoing structural change. Finally, we explore the determinants of structural change in exports by looking at variables such as GDP growth, export growth, the real exchange rate, the growth rate of world trade, trade liberalization, and the degree of product concentration in the country’s export base.

Suggested Citation

  • Hamna Ahmed & Naved Hamid, 2014. "Patterns of Export Diversification: Evidence from Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 19(Special E), pages 307-326, September.
    • Handle: RePEc:lje:journl:v:19:y:2014:i:sp:p:307-326
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    References listed on IDEAS

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    1. Prebisch, Raúl, 1950. "The economic development of Latin America and its principal problems," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 29973, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    2. Fahim Al-Marhubi, 2000. "Export diversification and growth: an empirical investigation," Applied Economics Letters, Taylor & Francis Journals, vol. 7(9), pages 559-562.
    3. Amin Gutierrez de Pineres, Sheila & Ferrantino, Michael, 1997. "Export diversification and structural dynamics in the growth process: The case of Chile," Journal of Development Economics, Elsevier, vol. 52(2), pages 375-391, April.
    4. World Bank, 2014. "World Development Indicators 2014," World Bank Publications - Books, The World Bank Group, number 18237, December.
    5. Krugman, Paul, 1979. "A Model of Innovation, Technology Transfer, and the World Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 253-266, April.
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    Cited by:

    1. Inayat U. Mangla & Muslehud Din, 2015. "The Impact of the Macroeconomic Environment on Pakistan’s Manufacturing Sector," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 20(Special E), pages 241-260, September.
    2. Aamir Hussain Siddiqui, 2018. "Export Diversification and Growth in Pakistan: An Empirical Investigation from 1972 to 2015," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 10(1), pages 107-132, March.
    3. Amir Azam, 2020. "The Comparative Analysis of the Industrial Policy Impact on Export Performance in the Military and Democratic Regime of Pakistan," Virtual Economics, The London Academy of Science and Business, vol. 3(2), pages 61-76, April.
    4. repec:thr:techub:1005:y:2020:i:1:p:84-96 is not listed on IDEAS
    5. Amir Azam, 2020. "The Impact of Industrial Policy on Export Diversification: Some Empirical Evidences from Pakistan," Technium Social Sciences Journal, Technium Science, vol. 5(1), pages 84-96, March.
    6. Aamir Hussain Siddiqui, 2020. "Analysis of Pakistan Trade Policies in the Context of Export Diversification," Journal of Finance and Economics Research, Geist Science, Iqra University, Faculty of Business Administration, vol. 5(1), pages 59-76, March.

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    More about this item

    Keywords

    Pakistan; export; growth; trade;
    All these keywords.

    JEL classification:

    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General

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