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An Empirical Analysis of the Linder

Author

Listed:
  • Syed Adnan Haider Ali Shah Bukhari

    (Faculty of Computer Science and IT, Federal Urdu University of Arts, Science, and Technology, Karachi.)

  • Mohsin Hassnain Ahmad

    (Applied Economics Research Center, University of Karachi, Karachi.)

  • Shaista Alam

    (Applied Economics Research Center, University of Karachi, Karachi.)

  • Syeda Sonia Haider Ali Shah Bukhari

    (Center of Economics and Social Sciences Research, Government College university, Faisalabad.)

  • Muhammad Shabihuddin Butt

    (Applied Economics Research Center, University of Karachi, Karachi.)

Abstract

This paper presents empirical evidence in support of the Linder theory of international trade for three of the South Asian countries, Bangladesh, India, and Pakistan. This finding implies that these countries trade more intensively with countries of other regions, which may have similar per capita income levels, as predicted by Linder in his hypothesis. The contribution of this research is threefold: first, there is new information on the Linder hypothesis by focusing on South Asian countries; second, this is one of very few analyses to capture both time-series and cross-section elements of the trade relationship by employing a panel data set; third, the empirical methodology used in this analysis corrects a major shortcoming in the existing literature by using a censored dependent variable in estimation.

Suggested Citation

  • Syed Adnan Haider Ali Shah Bukhari & Mohsin Hassnain Ahmad & Shaista Alam & Syeda Sonia Haider Ali Shah Bukhari & Muhammad Shabihuddin Butt, 2005. "An Empirical Analysis of the Linder," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 44(3), pages 307-320.
  • Handle: RePEc:pid:journl:v:44:y:2005:i:3:p:307-320
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    File URL: http://www.pide.org.pk/pdf/PDR/2005/Volume3/307-320.pdf
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    References listed on IDEAS

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    1. Thomas Kennedy & Richard McHugh, 1983. "Taste similarity and trade intensity: A Test of the linder hypothesis for United States exports," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 119(1), pages 84-96, March.
    2. Deardorff, Alan V., 1984. "Testing trade theories and predicting trade flows," Handbook of International Economics,in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 10, pages 467-517 Elsevier.
    3. Thursby, Jerry G & Thursby, Marie C, 1987. "Bilateral Trade Flows, the Linder Hypothesis, and Exchange Risk," The Review of Economics and Statistics, MIT Press, vol. 69(3), pages 488-495, August.
    4. David Greytak & Ukrist Tuchinda, 1990. "The composition of consumption and trade intensities: An alternative test of the linder hypothesis," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 126(1), pages 50-58, March.
    5. Bowen, Harry P & Leamer, Edward E & Sveikauskas, Leo, 1987. "Multicountry, Multifactor Tests of the Factor Abundance Theory," American Economic Review, American Economic Association, vol. 77(5), pages 791-809, December.
    6. Francois, Joseph F & Kaplan, Seth, 1996. "Aggregate Demand Shifts, Income Distribution, and the Linder Hypothesis," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 244-250, May.
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    Cited by:

    1. María José Yepes, Esperanza Arias, Lina Marcela Molano, Ferney Molina, María Fernanda Ramírez, 2012. "Incidencia De Las Variables Del Comercio Exterior (Importaciones Y Exportaciones) En La Transferencia De Conocimientos: El Caso De La Industria Textil Colombiana," REVISTA ISOCUANTA 012353, UNIVERSIDAD SANTO TOMÁS.
    2. Rana Nabeel Ahmed & Kahlil Ahmad, 2016. "Impact of Population on Economic Growth: A Case Study of Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 5(3), pages 162-176, September.

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