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Determinants of Intra-Industry Trade between Pakistan and Selected SAARC Countries

Author

Listed:
  • Adnan Akram

    (Pakistan Institute of Development Economics, Islamabad)

  • Zafar Mahmood

    (Pakistan Institute of Development Economics, Islamabad)

Abstract

This paper analyses country-specific and industry-specific determinants of intra-industry trade (IIT) between Pakistan and other SAARC countries using panel data techniques. This paper also disentangles total IIT into horizontal and vertical IIT. The Vertical IIT is further divided into high-quality and low quality IIT. This paper finds that country-specific variables are more important in explaining the IIT relative to industry-specific variables. The decomposition of IIT shows that in the SAARC region Pakistan’s IIT is mostly comprised of the vertical IIT. The share of horizontal IIT is comparatively less. The paper offers specific policy recommendations for the promotion of IIT in the SAARC region.

Suggested Citation

  • Adnan Akram & Zafar Mahmood, 2012. "Determinants of Intra-Industry Trade between Pakistan and Selected SAARC Countries," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 51(1), pages 47-59.
  • Handle: RePEc:pid:journl:v:51:y:2012:i:1:p:47-59
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    More about this item

    Keywords

    IIT; Horizontal IIT; Vertical IIT;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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