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Can a path to peace promote export growth? Evidence from Pakistan and its trading partners

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Abstract

This study has investigated the connection between peace and performance of Pakistan’s export sector. The interstates conflicts, terrorist activities and war elements disturb the industry supply chain, damage the means of transportation, and increase the security measures and regulations, which make trade more expensive. On the other hand, encouragement of the peace process lowers military conflicts, promotes diplomatic cooperation, and hence trade among the nations. The purpose of the study is to test whether domestic peace in Pakistan relative to its trading partners promotes its exports. For empirical analysis, we use panel data for Pakistan and its 26 trading partners in export over the period 2007–2018. After controlling the impacts of economic size, market size, infrastructure, and exchange rate, we found that peace in Pakistan relative to its trading partners is important to promote its export sector, which is directly linked with local industries and the wellbeing of individuals. The economic size and market size of the exporting nations relative to Pakistan also positively contributed towards the exports. The depreciation of Pakistan’s exporting countries’ currencies relative to its currency lowers the volume of exports. Besides, it is also observed that a major portion of Pakistan’s exports is routed in a specific region or few countries. Therefore, it is suggested that the government should take active measures to reduce the internal as well as external conflicts, terrorists’ attacks, and war elements to promote the volume of exports.

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Notes

  1. For the list of these countries see appendix Table 6.

  2. For details of variables and respective data sources see appendix Tables 3 and 4.

  3. For descriptive statistics see appendix Table 4.

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Authors and Affiliations

  1. Aarhus University, Aarhus, Denmark

    Amjad Naveed

  2. Forman Christian College University, Lahore, Pakistan

    Ghulam Shabbir & Muhammad Ali Khan

  3. Minhaj University Lahore, Lahore, Pakistan

    Shabib Haider Syed

  4. International University of Applied Sciences, Bad Honnef, Germany

    Muhammad Ashfaq

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  1. Amjad Naveed
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  2. Ghulam Shabbir
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  3. Shabib Haider Syed
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  4. Muhammad Ashfaq
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  5. Muhammad Ali Khan
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Correspondence to Amjad Naveed.

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Appendix

Appendix

See Tables 3, 4, 5, 6.

Table 3 Variable, definition, and data source
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Table 4 Descriptive statistics
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Table 5 Correlation Coefficients Matrix
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Table 6 List of 26 Countries included in the sample
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Naveed, A., Shabbir, G., Syed, S.H. et al. Can a path to peace promote export growth? Evidence from Pakistan and its trading partners. Qual Quant 56, 3309–3324 (2022). https://doi.org/10.1007/s11135-021-01272-x

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