The Impact of Emigrants, Trade Costs, and Trade Agreements on Exports of Pakistan.

Muhammad Saif ur Rehman, Gulzar Khan, and Zafar Mahmood

Abstract

This paper examines the impact of the stock of Pakistani emigrants, trade costs, and trade agreements on exports of Pakistan. While using panel data of 30 importing partners of Pakistan, the study utilizes pooled mean group estimator, for the period 1995 to 2021. As a precursor, this study estimates the trade costs separately for export-oriented agricultural goods and manufactured goods. The study results show that overall trade costs are declining over time and vary across trading partners. The impact of trade costs on exports is negative and statistically significant both in the short run and long run. Moreover, the impact of the stock of emigrants residing in trading partner countries is positive and significant for agricultural exports while insignificant for manufactured exports in the long run. Finally, the impact of trade agreements, between Pakistan and its trading partners, is statistically significant and positive for manufactured exports while insignificant for agricultural exports. The paper concludes with six important trade policy recommendations for Pakistan