Pre and post WTO analysis of south Asian economies: evidence from panel data estimation

By using statistical tools and panel data estimation techniques, this paper examines the impact of WTO (World Trade Organization) on growth, trade and FDI in South Asia. Statistical analysis supports that exports from and imports and FDI inflows to South Asian economies increased significantly after joining the WTO. However, panel data estimation shows that under the WTO regime, the imports and exports contribution to GDP in the region increased, while the role of FDI remained insignificant.trade, FDI, growth, panel estimation

The Causality and Economic Impact of FDI inflows from Trade Partners in Pakistan

This paper examines causality between FDI, GDP, Exports and Domestic Investment by using Granger and multivariate Granger causality tests. The study also employs gravity based panel model to investigate the impact of FDI inflows from trade partners on GDP, trade and domestic investment in Pakistan. The results show that two-way causality runs between GDP, domestic investment and FDI, while unidirectional causality is detected from exports to FDI. Our panel data estimation confirms the positive role of FDI inflows in GDP and domestic investment while the results shows that the role of FDI is insignificant in case of exports and imports. Similarly, the concentration and sporadic FDI inflows from a few trade partners is adversely affecting GDP and increases imports without affecting domestic investment and exports. On the other hand minor FDI inflows from trade partners significantly contribute to GDP and decreases imports.trade partners, causality, gravity model, concentration

Does foreign capital inflows really stimulate domestic investment: a case study of Pakistan

By using system of equations and OLS estimation techniques, this paper examines the impact of foreign capital inflows on domestic investment in Pakistan. The system of equation shows that there is more than one-for-one relation between FDI and domestic investment, while the role of portfolio and loan in stimulating domestic investment is insignificant. The system of equation also shows that the impact of FDI on domestic investment is stronger than the role of domestic investment in attracting FDI. Similarly, OLS techniques confirmed that FDI complements domestic investment, particularly private investment. Contrary to other forms of capital inflows, FDI is positively and significantly correlated with domestic investment in different model specifications.capital inflows, domestic investment, system of equations, Pakistan

The impact of Oil Price and Oil Price Fluctuation on Growth Exports and Inflation in Pakistan

In this study we employed the ARDL bound test in order to detect cointegration relation of oil price and oil price fluctuation with GDP, exports and inflation in Pakistan. Our results confirmed cointegration among the variables when GDP was considered as dependent variable, while in case of inflation as responding variable, the long run relation among the variables are confirm only when oil price was replaced with oil price fluctuations as an explanatory variable. Applying VECM technique, we confirmed that causal link is running from oil price and oil price fluctuation to GDP and inflation. We could not detect causality running from oil prices and oil price fluctuation to exports or vice versa. Finally the augmented granger causality verified our findings of causal relation running from oil price and oil price fluctuation to GDP and Inflation both in combination with other variables as well as individually. We found that oil price fluctuation compared to oil prices drastically and asymmetrically affect the macro-economy of Pakistan

Does Chinese Investment Contribute to The US Economy? An Analysis of Selected US States’ Growth, Employment and Exports

Our paper analyzed the impact and causal relation of outbound Chinese FDI on growth, employment and export performance of 16 selected US states. The study employed Panel data where contemporaneous panel fixed estimation results shows that the impact of Chinese outbound FDI on employment and export are insignificant. However, the impact of FDI on growth is positive and significant in interaction with States export to China. Applying heterogeneous panel causality approach on a refined dynamic panel model indicates that Chinese FDI does not cause GDP, exports and employment while the results of reverse causality shows that US States GDP (market size) cause the inflow of Chinese outbound FDI. Though the impact of meager Chinese out bound FDI in the US is insignificant to marginally positive but in no way the impact is adverse. Keeping in view the experience of Japanese outbound FDI to the US in 1980's, we come up with some policy recommendation for Chinese investors

Economic rationale, trade impact and extent of antidumping – case study of Pakistan

This paper has analyzed the economic and political justification, trade impact and extent of antidumping measures initiated by Pakistan. Screening models for anti-predatory behaviour, Herfindahl-Hireshmann Index (HHI) for concentration and descriptive statistical measures used to testify the Anti dumping (AD) behaviour, determinants and spread impact. The results are consistent with the earlier literature that AD duties create trade reduction and diversion. It is evident from the results in half of the cases studied that an economic rationale has been followed in the application of AD (Anti-dumping) duties in Pakistan. Although the number of AD cases is limited, Pakistan has emerged as one of the intensive users of AD, relative to its total import share. It is also evident from the fact that intensive use of AD reduces trade and increases trade barriers, similarly, trade diversion reduces the chances of trade reduction. The key message emerging from this research is that trade diversion persists and in some cases trade diversion is substantial and it offsets the effect of AD measures on named countries to the benefit of non-named countries

Economic rationale, trade impact and extent of antidumping – case study of Pakistan

This paper has analyzed the economic and political justification, trade impact and extent of antidumping measures initiated by Pakistan. Screening models for anti-predatory behaviour, Herfindahl-Hireshmann Index (HHI) for concentration and descriptive statistical measures used to testify the Anti dumping (AD) behaviour, determinants and spread impact. The results are consistent with the earlier literature that AD duties create trade reduction and diversion. It is evident from the results in half of the cases studied that an economic rationale has been followed in the application of AD (Anti-dumping) duties in Pakistan. Although the number of AD cases is limited, Pakistan has emerged as one of the intensive users of AD, relative to its total import share. It is also evident from the fact that intensive use of AD reduces trade and increases trade barriers, similarly, trade diversion reduces the chances of trade reduction. The key message emerging from this research is that trade diversion persists and in some cases trade diversion is substantial and it offsets the effect of AD measures on named countries to the benefit of non-named countries

Does Trade with China Can Make Growth in Pakistan More Inclusive? Pre and Post Empirical Impact of China-Pakistan Economic Corridor

The main objective of this study is to analyze the impact of Pakistan trade relation with China, especially in the perspective of "China-Pakistan Economic Corridor" (CPEC), on the inclusive Growth in Pakistan. This study contains two phases. Phase-I elaborates the impact of Pakistan trade with China and its inclusive growth without the effect of CPEC during 1985 – 2017 by applying ARDL frame-work. The results of the study confirmed that the influence of Pakistan-trade with China and its impact on the inclusive growth of Pakistan is Positive and Significant. Granger Causality test also give robust evidence that the relationship between Pakistan trade with China enhances inclusive growth of Pakistan. Correspondingly, Phase-II, examined the impact of CPEC and Pakistan-trade with China on the inclusive growth of Pakistan during 1990 – 2017 by using Ordinary Least Square (OLS). The results argue that the Impact of CPEC and Trade volume of Pakistan with China encourages inclusive growth of Pakistan.  Beside the main variables, the control variable like, (foreign direct investment, government expenditure, financial development, trade openness and inflation) also positive and significant effect on inclusive growth but in some cases the impact is insignificant. Keywords: Trade; Inclusive Growth; CPEC; ARDL; Pakistan. DOI: 10.7176/DCS/9-3-05 Publication date:March 31st 201

Pre and post WTO analysis of south Asian economies: evidence from panel data estimation

By using statistical tools and panel data estimation techniques, this paper examines the impact of WTO (World Trade Organization) on growth, trade and FDI in South Asia. Statistical analysis supports that exports from and imports and FDI inflows to South Asian economies increased significantly after joining the WTO. However, panel data estimation shows that under the WTO regime, the imports and exports contribution to GDP in the region increased, while the role of FDI remained insignificant

Does foreign capital inflows really stimulate domestic investment: a case study of Pakistan

By using system of equations and OLS estimation techniques, this paper examines the impact of foreign capital inflows on domestic investment in Pakistan. The system of equation shows that there is more than one-for-one relation between FDI and domestic investment, while the role of portfolio and loan in stimulating domestic investment is insignificant. The system of equation also shows that the impact of FDI on domestic investment is stronger than the role of domestic investment in attracting FDI. Similarly, OLS techniques confirmed that FDI complements domestic investment, particularly private investment. Contrary to other forms of capital inflows, FDI is positively and significantly correlated with domestic investment in different model specifications