Empirical Economic Review

Pakistan’s Trade Policies, Non-Tariff Measures and Concerns Of Stakeholders

Hamid Haroon Ur Rashid — 2023-06-30

Pakistan can increase its exports by 12 billion dollars till 2024 if integration with international market is improved, and strong linkages are developed among value chains (ITC, 2020). But this potential development is facing impediments due to transparency issues, imposition of non-tariff measures, ambiguous regulations at home and lack of information among both importers and exporters. This paper is dedicated to the discussion of Pakistan’s trade policies, tariff structure, rules governing non-tariff measures, and discussion about the concerns of business community and other stakeholders on NTMs. Application of NTMs in Pakistan, and their shortcomings are also discussed in detail. Then based on these discussions some recommendations are forwarded. Study shows that most of the hurdles faced by traders are home borne. If regulations are made easier at home and mutual recognition of standards is acquired with partner countries, then across the border trade can become much easier.

Testing for homogenous or heterogenous doers in Longitudinal latent class regression framework

Saima Ishaq — 2023-06-30

Latent class regression analysis is applied in context of conditional and unconditional analysis. The empirical analysis is conducted in novel way for exploratory and confirmatory perspective utilizing longitudinal British household data of Understanding society. The study aims to explore the profile differences for subjective satisfaction towards work and confirms the absence of differential effects of job-related variables across the explored broad classes of satisfied and non satisfied job doers. For further insights into behaviour of selected classes, conditional models are employed. Step 3 approach is utilized in this regard for investigating the contribution of background variables such as gender, age, occupation and quality of life for shaping their response of being satisfied or non satisfied with their jobs. This study overall tests and confirms the absence of heterogenous triggers for job satisfaction in British society.

Evaluating the effectiveness of foreign capital flows in mitigation of gender inequality in Developing countries

Sadia Anjum — 2023-06-30

Over the decades, foreign capital inflows (FCIs) have been contributing to the economic growth and development of underdeveloped and developing economies. However, it is imperative to inspect the effect of FCIs on gender inequality (GI). The latter includes SDG 5 which addresses the elimination of GI in all its forms. The existing empirical literature on the relationship between FCI-GI nexus shows mixed results. The current study scrutinized the effects of FCIs on GI in a panel of 71 developing economies for the time period 2001-2019. The study used the system generalized methods of moments (GMM) for model estimation. The positive and significant impact of remittances on G I was explored. It was found that official development assistance (ODA) caused an increase in GI in developing economies. The results showed that gross domestic product (GDP) and trade openness (TOP) increased GI. However, good governance was found to reduce GI in developing economies. The outcomes provide a guideline for the role of FCIs in reducing GI in developing economies.

Examining the Impact of Corruption on Financial Sector Development in Arab League Countries

Adnan Bashir — 2023-06-30

Arab League Countries have seen major regulatory and financial reforms in the last two decades and during this period these counties have been marred by corruption. In this background, this study explores the impact of corruption on financial sector development in Arab League countries from 2001 to 2020. By using the dynamic panel data estimation technique of the Generalized Method of Moments on a sample of 20 Arab League countries, the study reports its findings. The finding shows that there is a significant negative effect of corruption on financial sector development. These results favor the notion of the “sand the wheels” hypothesis. The findings of this study highlight the insensitiveness of financial development to corruption during Global Financial Crisis (2008). The results also indicate that there is an adverse effect of corruption on financial development after Arab Spring. The study acknowledges the moderation role of rule of law in the relationship between corruption and financial development.

Uncertainty in Fiscal and Monetary Policy and its Impact on Economic Growth: An Analysis from Pakistan

Ayesha Zahid — 2023-06-30

Uncertainty or shocks in macroeconomic policies have been a debated issue all over the world because these shocks severely influence the growth of economies. To analyze the impacts of these shocks in the context of Pakistan, the current study determined the role of fiscal and monetary policy uncertainty by taking the time series data for the period 1971-2020. In this regard, GARCH and ARDL cointegration model were applied. Empirical evidence revealed that in the long-run, fiscal uncertainty in terms of government expenditure positively affects the economy and monetary uncertainty in terms of money supply negatively affects the economy. While, in the short-run, uncertainty of both policies has a negative influence on the economic growth of Pakistan. The study also gauged other factors, such as, exchange rate, interest rate, and inflation with respect to their impact on economic growth. It was found that these factors positively and significantly sway growth in the long-run.

Exploring and Evaluating the Association between Environmental Sustainability and Economic Progress: A Cross-Country Analysis of Green Tourism

Sumaira Lodhi — 2023-06-30

Environment plays a critical role in sustaining the natural resources of both developed and developing countries. In this regard, climate change poses a significant threat to the entire world, depleting the natural resources of countries and making the land inhabitable. This study is a cross-sectional study. It employed ordinal regression using the least square method to examine the impact of the threatened species, environmental performance, tourism income, tourism expenditure, GDP per capita, environment related treaties, and CO₂ emissions on tourism income and selected dependent variables in different clusters of 106 countries in 2019. The study included countries from Sub Sharan Africa; South and Southeast Asia; South America; Oceania; North Asia; North America; North Africa; Mesoamerica; East Asia; Caribbean Islands; and West and Central Asia. The results varied across regions and countries. The study was based on three clusters. These clusters were based on the highest number of threatened species, higher GDP per capita, and the highest environmental sustainability score on a 1-7 scale as measured by WEF. Various sources of data were used to collect secondary data including WEF reports, World Bank, UN Red List, and Atlas big. In all three models for all the clusters, improvement in environmental performance had a positive impact on GDP per capita and tourism income. For all clusters poor climatic conditions in terms of CO₂ emissions and poor environmental performance further increased the number and percentage of threatened species. A policy was proposed to protect endangered species through improved environmental conditions and quality tourism infrastructure, tourism expenditure, and increased environment related treaties.

How Core Labor Standard and Informal Sector Employment Effect the Economic Growth?

Afshan Muneer — 2023-07-26

At present time, the phenomenon of core labor standards and informal sector employment entice attention in the economic growth paradigm. This study elaborates the influence of core labor standards on the economic growth of Pakistan in the presence of informal sector employment. For this purpose, the human capital augmented solow growth model proposed by (Mankiw et al. 1992) is extended by adding core labor standards and informal employment. The aggregate time series data set is used for the time span (1999-2017). To resolve the endogeneity problem, the non- linear two stage least square instrumental variable (NLTSLS-IV) approach is applied to estimate the growth model. The estimated outcome elaborates the positive relation of core labor standards with the economic growth. The relation between the growth rate of both formal and informal employment is positive with economic growth. The conclusion is that the enforcement of core labor standards increase the economic productivity through protecting workers rights and will ultimately enhances the economic growth. The policy maker should consider the phenomenon of labor standards enforcement in the growth policies of the economy.