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Regional integration and export performance of Pakistan: Empirical evidence from the Shanghai Cooperation Organization (SCO)

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  • Muhammad Waseem Shahzad
  • Muhammad Asif Khan
  • Mohammed Arshad Khan
  • Ahsanuddin Haider

Abstract

The study examines export impact of Pakistan’s integration into Shanghai Cooperation Organization (SCO) on its export’s performance. We apply Poisson Pseudo-Maximum Likelihood (PPML) on augmented gravity model to estimate trade data from the period before and after permanent membership with Shanghai Cooperation Organization in 2017. The study aims to explore changes in exports volume and analyze the key mechanism through which Shanghai Cooperation Organization promotes exports. The study assesses that after integration which key exports sector such as agriculture or manufacturing sectors are affected more significantly. The initial findings suggest that SCO integration positively affect and provide access to Central Asian markets, leading to modest but noticeable promotion in exports promotion. In heterogeneity analysis we find that exports of Pakistan are more significant with low and middle-income level countries compared to higher-income level countries. Additionally, exports in the manufacturing sector benefited more than in the agriculture sector. The significant and positive findings of mechanism analysis indicate that the belt and road (B&R) initiative and bilateral trade agreements are the key factors to enhanced exports. The overall impact remains moderated by structural changes in Pakistan economy, such as poor infrastructure, deficiency in energy sector and limited trade relations with its neighbors India and Iran. The study concludes that although the SCO integration has positively promoted exports of Pakistan however, it requires to address domestic economic constraints and capitalize more effectively the benefits of SCO membership through regional cooperation mechanism. For more potential benefits in the region SCO needs to expand B&R connectivity, encourage more trade agreements, and adopt favorable environment to attract high income countries in the organization. The study provides the base for future research in depth analysis of long-term impact of SCO integration on Pakistan exports.

Suggested Citation

  • Muhammad Waseem Shahzad & Muhammad Asif Khan & Mohammed Arshad Khan & Ahsanuddin Haider, 2024. "Regional integration and export performance of Pakistan: Empirical evidence from the Shanghai Cooperation Organization (SCO)," PLOS ONE, Public Library of Science, vol. 19(10), pages 1-19, October.
    • Handle: RePEc:plo:pone00:0311984
    DOI: 10.1371/journal.pone.0311984
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    References listed on IDEAS

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    1. Muhammad Waqas Khalid & Ashar Sultan Kayani & Jamal Mohammed Alotaibi & Muhammad Muddassir & Bader Alhafi Alotaibi & Hazem S. Kassem, 2020. "Regional trade and food security challenges: The case of SAARC countries," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 66(7), pages 335-344.
    2. Atta Ullah & Chen Pinglu & Saif Ullah & Shujahat Haider Hashmi, 2021. "Nexus of regional integration, socioeconomic determinants and sustainable development in belt and road initiative countries," PLOS ONE, Public Library of Science, vol. 16(7), pages 1-29, July.
    3. Sotaro Sada & Yuichi Ikeda, 2021. "Regional economic integration via detection of circular flow in international value-added network," PLOS ONE, Public Library of Science, vol. 16(8), pages 1-28, August.
    4. Roni Bhowmik & Yuhua Zhu & Kuo Gao, 2021. "An analysis of trade cooperation: Central region in China and ASEAN," PLOS ONE, Public Library of Science, vol. 16(12), pages 1-25, December.
    5. Lu Na-Xi & Huang Meng-Fang & Lu Shan-Bing, 2019. "How the Belt and Road Initiative Can Help Strengthen the Role of the SCO and Deepen China’s Cooperation with Russia and the Countries of Central Asia," India Quarterly: A Journal of International Affairs, , vol. 75(1), pages 56-68, March.
    6. Khan, Muhammad Aamir, 2017. "Regional Trade and Economic Development: Options for Pakistan," Conference papers 332899, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
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