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Impact of Export Subsidies on Pakistan’s Exports

Author

Listed:
  • Nadeem Ul Haque

    (Pakistan Institute of Development Economics, Islamabad.)

  • M. Ali Kemal

    (Pakistan Institute of Development Economics, Islamabad.)

Abstract

Throughout Pakistan’s history, policy has sought to promote exports through government support and incentives. The government machinery is geared to export promotion especially through direct and indirect subsidies. Surprisingly, these policies have been continued without serious examination. This paper makes a first attempt to evaluate these policies by estimating the impact of two such schemes—export financing and rebate/refund schemes—on export performance. Our analysis shows that, over the long run, the export financing scheme had a negative effect on exports while the rebate/refund scheme affected exports insignificantly. Subsidy schemes clearly do not seem to work, yet they have been retained for many years.

Suggested Citation

  • Nadeem Ul Haque & M. Ali Kemal, 2007. "Impact of Export Subsidies on Pakistan’s Exports," PIDE-Working Papers 2007:26, Pakistan Institute of Development Economics.
    • Handle: RePEc:pid:wpaper:2007:26
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    File URL: https://www.pide.org.pk/pdf/Working%20Paper/Working%20Paper-26.pdf
    File Function: First Version, 2007
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    Citations

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    Cited by:

    1. Uzma Zia & Fozia Tabussom, 2023. "Impact of Export Financing Schemes on Export Performance Qualitative Approach," PIDE-Working Papers 2023:13, Pakistan Institute of Development Economics.
    2. Fábio Batista & José Eduardo Matos & Miguel Costa Matos, 2017. "Assessing the Competitiveness of the Portuguese Footwear Sector," GEE Papers 0066, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Feb 2017.
    3. Nadeem Ul Haque & Musleh-ud Din & Lubna Hasan, 2007. "Research at PIDE: Key Messages," PIDE Books, Pakistan Institute of Development Economics, number 2007:2, December.
    4. Arby, Muhammad Farooq & Younus, Sayera & Tobgye, Sonam & Dema, Phurpa & Das, Praggya & Shafwath, Aminath & Bhatta, Siddha Raj & Raza, Bilal & Perera, W.S Navin, 2021. "The use of Unconventional Monetary Policy Instruments by South Asian Central Banks," MPRA Paper 119287, University Library of Munich, Germany, revised 01 Apr 2023.
    5. Zhang, Teng & Xu, Shu & Zhang, Shuoxun, 2022. "Are export tax rebates patronage for Chinese firms? An analysis of productivity," China Economic Review, Elsevier, vol. 75(C).
    6. Okunlola, Olalekan C. & Akinlo, Enisan A., 2021. "The Impact of Export Promotion Schemes on Agricultural Growth in Nigeria," African Journal of Economic Review, African Journal of Economic Review, vol. 9(1), January.
    7. 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.
    8. Imtiaz Ahmad, 2015. "The Value of Export Incentives," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 20(2), pages 99-127, July-Dec.
    9. Ana Rita Marques & Cátia Silva, 2018. "Assessing the Competitiveness of the Portuguese Chemical Sector," GEE Papers 0110, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Sep 2018.
    10. Mulu Gebreyesus & Ashagrie Demile, 2017. "Why export promotion efforts failed to deliver? Assessment of the export incentives and their implementation in Ethiopia," Working Papers 017, Policy Studies Institute.
    11. Tehseen Ahmed Qureshi & Anwar Shah, 2020. "Trade Agreements and Export Creation: An Empirical Analysis of Pakistan’s Exports at Industry Level," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 25(2), pages 93-118, July-Dec.
    12. Rasta-Pide, 2023. "The State Of Commerce In Pakistan: International & Domestic," PIDE Research Report 2023:15, Pakistan Institute of Development Economics.

    More about this item

    Keywords

    Rebate; Duty Drawback; Export Financing; Exports; Trade; Exchange Rate; Co-integration; Vector Error Correction; Pakistan;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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