Trade determinants between Pakistan and United Arab Emirate: A time series analysis

Abstract

Economic efficiency in production of commodities depends mainly on technological development, geographically location, capital, availability of natural resources, social setup, skilled labours, customs, some economic and financial priorities. Pakistan mostly traded with China, United Arab Emirates, United State of America and Saudi Arabia. The current study is aimed to estimate the impact of different factors affecting the bilateral trade of Pakistan with United Arab Emirates. The study used annual time series data for the period from 1988 to 2019. In this analysis total bilateral trade is used as dependent variable while population, Gross Domestic Product (GDP), inflations and exchange rate of Pakistan and United Arab Emirates (UAE) were used as independent variables. ARDL approach was applied to check the relationship among the variables. The study finds short run and long run significant relationship among the variables. The gaps in business related plans & polices and entrepreneurship deficiency have prevented the country to cope with the technology advancements. Further this gap is also responsible for greater export diversification and putting of Pakistan to accomplish higher value addition. Incompetent and disorganized firms are trying to get tax exemptions and dispensation through lobbying, whereas new emerging efficient and dynamic firms are also not given confidence to take a part in market.