EXPORT-LED GROWTH: TRADE POLICY PROSPECTIVE OF PAKISTAN

Abstract

This study examines the proposition that exports cause growth in gross domestic product GDP in the economy of Pakistan from 1973 to 2022. The study intends to analyze the export promotion strategy that was adopted by Pakistan's economy in the 1990s. Cointegration test reveals there is a long-run relationship between these two variables. However, causality is proved in both short and long-run from GDP to exports. The Trade openness and export growth both are prolonged association but in case of Pakistan persistent depreciation of PKR could not achieve desired level of export earning which implies that J-Curve theory does not exist in Pakistan.  This implies that growth in the domestic production base is vital to expansion in exports. The government or policymakers should give importance to and incentivize various production sectors of an economy so that they can contribute to the expansion of export markets.