Export Competitiveness In Pakistan

744 Words3 Pages
The export competitiveness or export performance generally can be measured by several factors, for instance, real exchange rate, comparative advantage, terms of trade, geographic concentration, trade policies, world income etc. However, the standard practice is to use revealed comparative advantage index. This part of the study examines the determinants of export performance of external sector of Pakistan with help of RCA Balassa index. RCA index determines export performance and export pattern of countries. Mahmood (2004) used RCA Balassa index to calculate comparative advantage for the nonagricultural sector of Pakistan. RCA index can be used for commodity specific and region specific but cannot conclude the future comparative advantage.…show more content…
Deficiency of infrastructure and macroeconomic volatility may deteriorate country’s export performance. In addition, poor governess, resources endowments and degree of technology affect overall performance and export competitiveness of an economy. The geographic position of a country, cultural similarities and its relation with the trading partner also influence the export performance of a country. A study conducted by Amador and Cabral (2008) using constant market share analysis of Portuguese economy for the time 1968-2006. Explains the results of a market share of Portugal to the world export were compared with benchmark countries such as Ireland and countries of South Europe. The study also compared manufactured exports enlargement and world exports expansion and originate that if Portuguese exports growth is higher than the world export growth than its share will be higher in the world market. A stable market share analysis fragmented country’s growth of its exports into four core components. Foremost component explains that boost in world exports also affects the export level of a country. The second factor explains production composition effect which may transform country’s competitive advantage because of specialization in products. Thirdly export concentration that is calculated by market distribution effect which amplifies actual exports due to elevated share in the market. The study also…show more content…
The cause behind is a dependency on agricultural based commodities such as cotton. Consequently, cotton-oriented manufactured products for example yarn, knitted; cotton clothes and woven products of Pakistan apprehended the demand of foreign markets. Commodity concentration deteriorated on the whole exports earning not only of Pakistan but of other developing countries as well. The reason is a larger dependency on primary products rather than commodity diversification. Tariq and Najeeb (1995) had pinched the same inference that product concentration in Pakistan has yielded significantly constructive effect on exports earning instability in Pakistan. Dosi, (1988) conducted a study at the firm level using a unique data set of Indonesia to analyze firms export behavior of manufacturing plants. According to this study export behavior of firms fluctuate due to differences in their technology. As Wanger, (2001) Technology, research and development are essential variables in determining exports. In the history of international trade theories akin to Heckser-Ohlin model was based on extremely strong assumptions of no economies scale, constant technology, and perfect competition but after the eighties, innovative theories of trade relaxed some rigorous assumptions to examine other sources of comparative advantage. Hence in new models, some assumptions were
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