scholarly journals A Panel Analysis of Trade Gravity between Pakistan and South Asian Countries

2020 ◽  
Vol 23 (4) ◽  
pp. 187-207
Author(s):  
Waheed Ullah Jan ◽  
Mahmood Shah
Keyword(s):  
Gravity Model ◽  
South Asian ◽  
Bilateral Trade ◽  
Negative Impact ◽  
Positive Impact ◽  
Least Square ◽  
Asian Countries ◽  
Trade Patterns ◽  
Data Set ◽  
Trade Relations

This paper attempts to examine Pakistan’s trade patterns with South Asian countries by using a gravity model of trade. The main objective of the study is to quantify the long‑run impacts of gravity variables. To achieve this objective, a panel data set for the period 2003 to 2017 has been used. Based on the mixed evidence of the results of panel unit root tests, Pooled Mean Group (PMG) and Panel Dynamic Ordinary Least Square (DOLS) techniques are applied. The outcome of the PMG and Panel DOLS models justifies the theoretical background of the gravity model and suggests that all the basic gravity variables haveusual signs. The RGDPs and population of both Pakistan and the partner country have a positive impact on their bilateral trade. On the other hand, the distance between the two trading countries and the exchange rate have a negative impact on bilateral trade.The uniqueness of this study is that it measures the impacts of qualitative variables along with basic gravity variables. Language similarities and common borders have a positive impact on bilateral trade. Pakistan has borders with India and Afghanistan, but their trade relations are not worth mentioning. The military conflicts between Pakistan and India, and the political suspicions between Pakistan and Afghanistan hinder their trade relations.

scholarly journals Research on the Efficiency and Potential of China's Trade with South Asian Countries-Based on the Stochastic Frontier Gravity Model

2021 ◽  
Vol 96 ◽  
pp. 01010
Author(s):  
Yifan Lei ◽  
Cuiping Li
Keyword(s):  
Gravity Model ◽  
Development Strategy ◽  
South Asian ◽  
Bilateral Trade ◽  
Positive Impact ◽  
Stochastic Frontier ◽  
Trade Agreement ◽  
Asian Countries ◽  
Empirical Results ◽  
Low Efficiency

In the context of COVID-19, international trade has been strongly impacted, and it is of great significance to accelerate trade exchanges with countries along the "Belt and Road" to achieve trade transformation. This paper uses the time-varying stochastic frontier gravity model to measure trade efficiency based on the data of China and South Asia from 2000 to 2019. The empirical results show that economic scale and population have a positive impact on trade. China's GDP growth is not conducive to the growth of bilateral trade volume, and distance is no longer a factor hindering trade. Trade inefficiency has a great impact on trade. Among them, whether to sign a free trade agreement, the quality of port infrastructure, the simple average tax rate of all products, and political risks have a more significant impact on the trade coefficient. The trade potential between China and South Asian countries is very large and different countries are uneven. China has high trade efficiency with Sri Lanka, Pakistan, India, and Bangladesh, while trade with Bhutan has extremely low efficiency, and trade with Maldives and Nepal is average. Based on the above empirical results and combined with the current epidemic situation, the corresponding conclusions and countermeasures are put forward. For example, exporters should continue to innovate to promote trade transformation and diversified development; combine the western development strategy to promote trade and South Asian exchanges; reduce trade tariff barriers between the two countries; Jointly maintain the security and political situation of the two countries.

scholarly journals Causal nexus between fiscal deficit and economic growth

2016 ◽  
Vol 4 (8) ◽  
pp. 1-19
Author(s):  
Ravinthirakumaran Navaratnam ◽  
Kasavarajah Mayandy
Keyword(s):  
Economic Growth ◽  
Sri Lanka ◽  
South Asian ◽  
Negative Impact ◽  
Positive Impact ◽  
Cointegration Analysis ◽  
Annual Data ◽  
Fiscal Deficit ◽  
Asian Countries ◽  
The Impact

The impact of fiscal deficit on economic growth is one of the most widely debated issues among economists and policy makers in both developed and developing countries in the recent period. This paper seeks to examine the impact of fiscal deficit on economic growth in selected South Asian countries, namely, Bangladesh, India, Nepal, Pakistan and Sri Lanka using time series annual data over the period 1980 to 2014. The paper uses cointegration analysis, error correction modelling and Granger causality test under a Vector Autoregression (VAR) framework. The results from this study confirmed that the fiscal deficit has a negative impact on economic growth in the South Asian countries considered in this study except Nepal, which confirmed the positive impact. The results also highlighted that the direction of causality for the SAARC countries is mixed where fiscal deficit causes economic growth for Bangladesh, Nepal and Pakistan, but the reverse is true for India and Sri Lanka.  

Iran’s trade policy of Asianization and de-Europeanization under sanctions

2017 ◽  
Vol 44 (4) ◽  
pp. 552-567 ◽  
Author(s):  
Mohammad Nasre Esfahani ◽  
Ehsan Rasoulinezhad
Keyword(s):  
Trade Policy ◽  
Bilateral Trade ◽  
Positive Impact ◽  
Foreign Trade Policy ◽  
Asian Countries ◽  
Trade Patterns ◽  
Nuclear Program ◽  
Content Type ◽  
Negative Effect ◽  
Model Approach

Purpose The purpose of this paper is to find out whether under sanctions, Iran’s trade direction has shifted from Europe (trade policy of de-Europeanization) toward Asia (trade policy of Asianization). Design/methodology/approach The paper conducts three panel data estimations (FE, RE, and FMOLS) based on the gravity model approach for bilateral trade patterns between Iran-25 EU members and Iran-25 Asian countries over the period 2006-2013. Findings The empirical evidence indicates a significant negative effect of sanctions on Iran-EU bilateral trade, while it has a positive impact on trade between Iran and the Asian countries. These findings empirically confirmed that the imposition of various sanctions related to the Iran’s nuclear program has pushed the foreign trade policy of this country toward Asianization and away from Europeanization. Originality/value To the best of the authors’ knowledge, this paper is the first attempt to examine the Iran’s trade policy changing under the imposition of sanctions related to its nuclear program.

scholarly journals Does Budget Deficit and Political Stability Effect Real Exchange Rate in South Asian Countries?

2021 ◽  
Vol VI (I) ◽  
pp. 26-38
Author(s):  
Ghulam Nabi ◽  
Kalimullah Bhat ◽  
Faheem Ghazanfar
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
South Asian ◽  
Budget Deficit ◽  
Unit Root Test ◽  
Panel Cointegration ◽  
Political Stability ◽  
Least Square ◽  
Asian Countries ◽  
Data Set

The study investigates the effect of political stability and budget deficit on the real exchange rate. We used a panel data set of south Asian countries, including Pakistan, China, Bangladesh and India. We applied the panel unit root test, Kaos panel Cointegration and fully modified the least square in the study to reach robustness of findings. Findings reveal that real exchange rate(RER) and political stability are positively related. It supports the argument that political stability attracts foreign investment, appreciates local currency, and leads to higher RER. However, results reveal that the budget deficit is not related to RER. This study provides new empirical evidence to policymakers and government officials that political stability encourages foreign investors and appreciates exchange rate.

scholarly journals A Gravity Model Approach towards Pakistan’s Bilateral Trade with SAARC Countries

2019 ◽  
Vol 22 (4) ◽  
pp. 23-38 ◽  
Author(s):  
Waheed Ullah Jan ◽  
Mahmood Shah
Keyword(s):  
Gravity Model ◽  
Fixed Effects ◽  
Bilateral Trade ◽  
Negative Impact ◽  
Positive Impact ◽  
Panel Study ◽  
Test Results ◽  
Fixed Effects Model ◽  
Trade Potential ◽  
The Common

This research paper attempts to estimate the bilateral trade of Pakistan with SAARC countries using a gravity model of trade. This panel study covers the period from 2003 to 2016. The empirical results are obtained through pooled OLS, fixed‑effects, and random‑effects estimators. On the basis of Hausman test results, the paper concentrates only on the findings of the fixed‑effects model. The empirical findings reveal that the GDPs of both Pakistan and the partner country have a positive impact on bilateral trade. Market size has a negative impact on trade and this is justified on the basis of the absorption effect. Similarly, distance and exchange rate also have a negative correlation with bilateral trade. The study finds that Pakistan has very low trade with India and Afghanistan, despite the common border. A common language has a positive but insignificant impact on Pakistan’s bilateral trade. The Paper also attempts to calculate the trade potential of Pakistan. The findings reveal that Pakistan has high trade potential with all SAARC member countries except the Maldives and Afghanistan.

scholarly journals The Determinant of Bilateral Trade in the East African Community: Application of the Gravity Model

2019 ◽  
Vol 11 (4) ◽  
pp. 1
Author(s):  
Ambetsa Wycliffe Oparanya ◽  
Kenneth P. Mdadila ◽  
Longinus K. Rutasitara
Keyword(s):  
Gravity Model ◽  
Bilateral Trade ◽  
Negative Impact ◽  
Positive Impact ◽  
Trade Flows ◽  
East African ◽  
African Region ◽  
East African Community ◽  
Corruption Index ◽  
Bilateral Trade Flows

This study examines the determinants of bilateral trade flows within the East African region using the Gravity model approach. Using a 40 year data obtained from the World Development Institute’s data base, the Random Effects model is applied to empirically determine the variables that drive bilateral trade within the region. The findings suggest that country size, contiguity, diaspora remittances and corruption index have a positive impact on the regions bilateral trade. On the other hand, foreign direct investment flows, net population effects and mobile subscription ratio have a negative impact on intra-trade flows among member states. Although not exhaustive, the study offers useful insights for policy makers to seek measures to spur the EAC intra-trade flows.

The effects of globalization, energy consumption and economic growth on carbon dioxide emissions in South Asian countries

2021 ◽  
pp. 0958305X2098689
Author(s):  
Muhammad Bilal Khan ◽  
Hummera Saleem ◽  
Malik Shahzad Shabbir ◽  
Xie Huobao
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
South Asian ◽  
Carbon Dioxide Emissions ◽  
Energy Use ◽  
Least Square ◽  
Asian Countries ◽  
Individual Country ◽  
Data Set ◽  
The Individual

This study analyzes the relationship between globalization, energy consumption, and economic growth among selected South Asian countries. This study also finds causal association between energy growth and nexus of CO2 emissions, and employed the premises of the EKC framework. The study used annual time series analysis, starting from 1972 to 2017. The data set has been collected from the world development indicator (WDI). The result of a fully modified ordinary least square (FMOLS) method describes a significantly worsen the quality environment in the south Asian region. The individual country as Bangladesh shows a positively significant impact on the CO2 emissions and destroying the level of environment regarding non-renewable energy and globalization index. However, negative and positive growth level (GDP) and square of GDP confirm the EKC hypothesis in this region. This study has identified the causality between GDP growth and carbon emission and found bidirectional causality between economic growth and energy use.

scholarly journals Does Foreign Direct Investment Influence Renewable Energy Consumption? Empirical Evidence from South Asian Countries

Energies ◽  
2021 ◽  
Vol 14 (12) ◽  
pp. 3470
Author(s):  
Xueqing Kang ◽  
Farman Ullah Khan ◽  
Raza Ullah ◽  
Muhammad Arif ◽  
Shams Ur Rehman ◽  
...  
Keyword(s):  
Foreign Direct Investment ◽  
Renewable Energy ◽  
Sri Lanka ◽  
South Asian ◽  
Environmental Sustainability ◽  
Direct Investment ◽  
Least Square ◽  
Asian Countries ◽  
Ordinary Least Square ◽  
The Relationship

In selected South Asian countries, the study intends to investigate the relationship between urban population (UP), carbon dioxide (CO2), trade openness (TO), gross domestic product (GDP), foreign direct investment (FDI), and renewable energy (RE). Fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS) models for estimation were used in the study, which covered yearly data from 1990 to 2019. We used Levin–Lin–Chu, Im–Pesaran–Shin, and Fisher PP tests for the stationarity of the variables. The outcomes of the panel cointegration approach looked at whether there was a long-run equilibrium nexus between selected variables in Pakistan, Bangladesh, India, and Sri Lanka. The FMOLS approach was also used to assess the relationship, and the results suggest that there is a significant and negative nexus between FDI and renewable energy in south Asian nations. The study’s findings reveal a strong and favorable relationship between GDP and renewable energy use. In South Asian nations (Sri Lanka, Pakistan, India, and Bangladesh), the FMOLS and DOLS findings are nearly identical, but the authors used the DOLS model for robustification. According to the findings, policymakers in South Asian economies (Sri Lanka, Pakistan, India, and Bangladesh) should view GDP and FDI as fundamental policy instruments for environmental sustainability. To reduce reliance on hazardous energy sources, the government should also reassure financial sectors to participate in renewable energy.

scholarly journals Policies, economic incentives and the adoption of modern irrigation technology in China

2015 ◽  
Vol 6 (2) ◽  
pp. 399-410 ◽  
Author(s):  
R. Cremades ◽  
J. Wang ◽  
J. Morris
Keyword(s):  
Agricultural Sector ◽  
Negative Impact ◽  
Positive Impact ◽  
Economic Incentives ◽  
Policy Implications ◽  
Irrigation Efficiency ◽  
Community Based ◽  
Data Set ◽  
Irrigation Technology ◽  
Governmental Support

Abstract. The challenges China faces in terms of water availability in the agricultural sector are exacerbated by the sector's low irrigation efficiency. To increase irrigation efficiency, promoting modern irrigation technology has been emphasized by policy makers in the country. The overall goal of this paper is to understand the effect of governmental support and economic incentives on the adoption of modern irrigation technology in China, with a focus on household-based irrigation technology and community-based irrigation technology. Based on a unique data set collected at household and village levels from seven provinces, the results indicated that household-based irrigation technology has become noticeable in almost every Chinese village. In contrast, only about half of Chinese villages have adopted community-based irrigation technology. Despite the relatively high adoption level of household-based irrigation technology at the village level, its actual adoption in crop sown areas was not high, even lower for community-based irrigation technology. The econometric analysis results revealed that governmental support instruments like subsidies and extension services policies have played an important role in promoting the adoption of modern irrigation technology. Strikingly, the present irrigation pricing policy has played a significant but contradictory role in promoting the adoption of different types of modern irrigation technology. Irrigation pricing showed a positive impact on household-based irrigation technology, and a negative impact on community-based irrigation technology, possibly related to the substitution effect that is, the higher rate of adoption of household-based irrigation technology leads to lower incentives for investment in community-based irrigation technology. The paper finally concludes and discusses some policy implications.

scholarly journals Measuring the Effect of Revealed Cultural Preferences on Tourism Exports

2018 ◽  
Vol 58 (8) ◽  
pp. 1262-1273 ◽  
Author(s):  
Sylvain Petit ◽  
Neelu Seetaram
Keyword(s):  
Gravity Model ◽  
Bilateral Trade ◽  
Data Set ◽  
Dummy Variables ◽  
Cultural Preferences ◽  
Step Procedure ◽  
Cultural Variable ◽  
Cultural Preference ◽  
Novel Method ◽  
Time Invariant

The aim of this article is to propose a novel method for measuring the effect of cultural preference on bilateral tourism receipts. The method applied is inspired from Disdier et al. (2010). Using the UNESCO classification and data on bilateral trade in cultural product, a proxy for cultural preferences is constructed. The variable is used in a gravity model for tourism export, which is estimated using a two-step procedure to avoid issues related to endogeneity. The data set used is a panel of 12 OECD countries for a period of 11 years. The variable for cultural preferences eliminates the problems with traditional methods, which by using dummy variables to account for cultural preferences, assume that the latter are time-invariant and symmetrical. The cultural variable constructed is found to be significant in explaining bilateral tourism exports with an elasticity of 0.39.

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