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Determinants of Exports in ‎SAARC Countries: ‎An Empirical ‎Evaluation

Mr. Mohammad Elyas Naseri, Dr. Nassir Ul Haq Wani and Dr.‎ Neeru Sidana

Volume 4 Issue 3 | Sep 2021

DOI: ‎10.31841/KJEMS.2021.99

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Given the importance of international trade and export performance in economic ‎growth, this ‎‎study attempts to examine the determinants of exports in SAARC ‎Countries, using a pooled ‎time-‎series and cross-section data over the period ‎‎2005-2018. The methodology employed is ‎the export ‎demand model specified ‎with appropriate variables. The fixed effects (country-‎specific intercepts) ‎model is ‎used to estimate the relationship of exports with its potential ‎determinants. The ‎study finds ‎a positive but insignificant impact of FDI on export growth. The ‎effect of ‎GDP, GDP growth, official ‎development assistance, development expenditures, ‎‎indirect taxes, labor force, and real exchange ‎rate on exports is highly significant ‎with a ‎positive sign. Furthermore, the results show that an ‎increase in savings ‎significantly ‎contributes to exports. Higher savings imply lower interest rates that ‎‎promote investment ‎opportunities. The study concludes that the factors ‎determining the export ‎supply need to be ‎focused on for augmentation. Hence, it ‎is suggested that the concerned ‎governments must ‎revisit the export policy and ‎make the new policy in line with new realities to ‎expand their ‎export base. ‎

JEL Classification: C22, F10, F14, F35, F43.‎

Keywords: Exports, South Asia, Determinants, Fixed effect model‎