Determinants of Export Growth at the Extensive and Intensive Margins: Evidence from Product and Firm-Level Data for Pakistan

51 Pages Posted: 20 Apr 2016

See all articles by Jose Guilherme Reis

Jose Guilherme Reis

World Bank

Daria Taglioni

European Central Bank (ECB) - Directorate General Economics

Date Written: January 1, 2013

Abstract

As globalization progresses and investment is mobile, it is ever more important for policy makers to understand drivers of growth and exports at the micro-level: Which products are being produced and exported? Which firms populate the domestic economy? Are they successful in exporting? How are firms affected by exogenous shocks and policy intervention? Through the use of descriptive statistics and econometric analysis, this paper assesses the trade competitiveness of Pakistan using micro-data. The case of Pakistan is interesting since the country's recent trade policy has reverted to a protectionist path since the mid-2000s and trade performance is stagnating, as indicated by a decrease in its trade-to-gross domestic product ratio over the past decade and low levels of sophistication of exports. The main findings of the paper are the following. Like many other countries, Pakistan posts a high concentration of exports in the hands of a limited number of large exporters. The dominance of few exporters has increased over time and it seems associated with the changes in trade policy. Low rates of product innovation and experimentation and a low ability of the Pakistani export sector to enter into new higher growth sectors are other features emerging from the data. All in all, the mediocre performance seems to be associated with internal problems with trade-related incentives, business environment, and governance, in addition to the well-known external constraints.

Keywords: Economic Theory & Research, Free Trade, Markets and Market Access, Debt Markets, Trade Policy

Suggested Citation

Reis, Jose Guilherme and Taglioni, Daria, Determinants of Export Growth at the Extensive and Intensive Margins: Evidence from Product and Firm-Level Data for Pakistan (January 1, 2013). World Bank Policy Research Working Paper No. 6341. Available at SSRN: https://ssrn.com/abstract=2209629

Jose Guilherme Reis (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Daria Taglioni

European Central Bank (ECB) - Directorate General Economics ( email )

Kaiserstrasse 29
D-60311 Frankfurt am Main
Germany

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