Estimation of Export Supply Function for Citrus Fruit in Pakistan

Abstract

There is strong evidence in the literature that export and economic growth have a positive relationship. In Pakistan, with an agrarian economy, earnings from primary agricultural exports are vital for the overall growth process. Fruits are the traditional export commodities, which contribute more than half of total export earnings from primary agricultural commodities. The persistent instability in world market prices for primary commodities has depressed the export earnings from these commodities over time. This poses great challenges to a country like Pakistan. The present study aims at examining changes in the volume of export of citrus fruit from Pakistan caused by such factors as changes in domestic and export prices, national product, foreign exchange rate, etc. The study uses time series data for the period 1975–2004 for citrus exports and related domestic price, export price, GDP, and foreign exchange rate, employing the co-integration and error correction techniques for analysis purposes.