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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Abstract
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