An empirical inquisition of the impact of exchange rate and economic growth on export performance of Pakistan
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Date
2013
Journal Title
Journal ISSN
Volume Title
Publisher
IDOSI Publications
Abstract
The role of international trade in economic development is very important. International trade is a
potential source to increase the world production of goods and services. All the trading nations get benefits
of increased world production caused by international trade. The present study empirically analyzed the impact
of exchange rate and economic growth along with some other important macroeconomic factors on exports
performance of Pakistan by using time series data. The study applied the Augmented Dickey-Fuller (ADF) Unit
Roots Test to check the stationarity of data series. Autoregressive distributed lag model is used to estimate
the long run relationship among the variables, followed by Unrestricted Error Correction Model (UECM).
Empirical results based on ARDL bound testing approach to co-integration show that there exist a long run
equilibrium relationship between Pakistan exports performance and its factors. In this study; Exchange rate,
gross domestic production and trade openness have positive and significant impact on export performance,
whereas role of foreign direct investment in determination of exports performance of Pakistan seems to be
insignificant according to our analysis. In the end, the estimates of labor force indicate the higher growth of
labor force along with lack of skills leads to contribute adversely on export oriented sectors where skilled labor
force is required.
Description
Keywords
Pakistan, Exports, Exchange Rate and Economic Growth
Citation
"Mahboob Ul Hassan, Muhammad Shahid Hassan and Haider Mahmood. (2013). An Empirical Inquisition of the Impact of Exchange Rate and Economic Growth on Export Performance of Pakistan. Middle-East Journal of Scientific Research 14 (2): 288-299, 2"