What Determines Bilateral Trade Flows? Evidence from ECO Region

What Determines Bilateral Trade Flows? Evidence from ECO Region

  • Muhammad Ramzan Sheikh SOE, BZU Multan
  • Ruth Kattumuri London School of Economics UK
  • Imran Sharif Chaudhry
  • Abodh Kumar

Abstract

This study provides an analysis of Pakistan’s bilateral trade in Economic Corporation Organization (ECO) region. The main purpose of this study is to assess the determinants of bilateral trade flows using the gravity trade model. Panel least square regression has been applied over the period of 1995 to 2015. Two types of gravity models have been estimated: traditional gravity trade model and modified gravity trade model. The study has identified income, population, distance, adjacency, area, landlockedness, continent and terrorism as the main drivers of Pakistan’s bilateral trade flows with ECO countries. It is suggested that policies in Pakistan should focus on improving economic growth; offer incentives to Pakistani people to engage more in trade flows; improve transportation to trade with ECO countries; and take measures to eradicate terrorism.

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Published
2019-03-30
How to Cite
SHEIKH, Muhammad Ramzan et al. What Determines Bilateral Trade Flows? Evidence from ECO Region. Review of Economics and Development Studies, [S.l.], v. 5, n. 1, p. 165-182, mar. 2019. ISSN 2519-9706. Available at: <https://publishing.globalcsrc.org/ojs/index.php/reads/article/view/560>. Date accessed: 25 june 2019. doi: https://doi.org/10.26710/reads.v5i1.560.