Impact of China-Pakistan Economic Corridor (CPEC) on Pakistan’s Trade: Empirical Evidence from Gravity Model
Keywords:CPEC, Gravity Approach, Pakistan Export, Fruit Market
Purpose: The China–Pakistan Economic Corridor (CPEC) is an
enormous project for both economies. There are much potential
remunerations for concerning frugalities in trade and industries of both
countries. The study was specifically designed to examine the influence of
CPEC on fruits export of Pakistan. The bilateral or regional trade was
examined through Gravity approach. Data was taken from 2013 to 2015.
Since distance plays a vital role in trade, the outcomes of gravity model are
estimated with ordinary least square method. Pakistan China Economic
Corridor is a mega project for both economies. It will make Pakistan and
China, the major economic players in the region and further enhance
economic conditions of both countries. Some of the basic determinations of
Pak-China economic corridor are to boost business opportunities, efficient
transport routes and expanding regional trade. The export target of Pakistan
was $ US 20 billion in 2013-2015. As of April 2015, Pakistan exports stand
at $ US 6,178 billion. Pakistan’s exports to Asia was amounted to $ US
1,649 billion which was 42 percent of its overall exports and the share of
fruit and nuts markets in Pakistan’s export was $ US 1,017 billion. The
paper analyses the CPEC’s impact on exports especially exports from fruit
market of Pakistan using Gravity Approach for the evaluation of this
bilateral trade. The results show that CPEC reduces the distance and it will
be more beneficial for perishable goods trade like fruits.
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