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Tapping Global Potential of Pakistan in Merchandise Trade: Evidence from PPML Based Gravity Model and Trade Potential Index

Nazia Gul

Quaid-i-Azam University, Islamabad, Federal Capital, Pakistan

E-mail Address: nazia.iiie@gmail.com

Corresponding author.

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Javed Iqbal

Quaid-i-Azam University, Islamabad, Federal Capital, Pakistan

E-mail Address: javed@qau.edu.pk

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https://doi.org/10.1142/S021909152150017XCited by:0 (Source: Crossref)

Abstract

This study aims to assess the trade potential of Pakistan in terms of destinations and products against 101 potential trading partners while applying the gravity model and the trade potential index. The findings indicate that Pakistan’s trade/export potential is maximum with the countries which are not its traditional trading partners. On the other hand, “manufactured goods”, “misc manufactured articles” and “food groups” are the products where maximum trade/export potential exists. Results indicate that Pakistan should not only adopt proactive measures to tap non-traditional partners but it is equally important to strengthen the level of trade with its traditional trading partners.

Keywords:

JEL: F10, F14

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