An Estimation of the Latent Bilateral Trade between India and Pakistan Using Panel Data Methods
The aim of this paper is to estimate the potential for trade between India and Pakistan, assuming a normalized neighborly relationship. We used an augmented gravity model with a panel data for 21 years. This paper utilizes the panel fixed effects decomposition and Hausman and Taylor estimation methods to estimate the effect of time-invariant variables on the volume of potential trade. The present volume of trade is dwarfed by our estimates of the potential trade. This seems to ratify the expectation of businesses on both sides. It would appear that the development of a bilateral relationship between India and Pakistan, in the context of regionalization, should be motivated by strong economic considerations. It would include sector-driven as well as market-access approaches. While the theoretical background appears subtle, strategic market consequences arise from the dynamics of regional market structure. Assuming a positive relationship between trade and per capita income, here is a peace dividend that is difficult to ignore in a regional environment of oppressive poverty.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 40 (2011)
Issue (Month): 1 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RGER20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RGER20|
When requesting a correction, please mention this item's handle: RePEc:taf:glecrv:v:40:y:2011:i:1:p:45-65. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.