Effect of regional factor productivity on manufacturing sector: The case of Sino-Pak economic ties

Abstract

Introduction: Economic ties and trade blocs increase the flow of trade between participating countries and lead to different levels of economic and structural changes. Case description: This paper focuses on the structure of industrial value-added between China and Pakistan, as the two countries recently launched the CPEC (China-Pakistan Economic Corridor) project. Discussion and evaluation: This study utilizes panel data from 1995 to 2015 to test certain factor effects on regional value-added through econometric analyses. The results show that each country has its own economic growth rate and market size that respond differently to industrial value-added production. Conclusion: Aggregate factor productivity at China is higher than in Pakistan but growth in factor productivity in the latter is higher than the former; similarly, the share of bilateral trade is higher in the case of Pakistan. Although each country responds differently to the new economic ties, the macroeconomic results support bilateral economic ties between them.

Income inequality, innovation and carbon emission: Perspectives on sustainable growth

“…Rapid economic growth, industrialisation and urbanisation are the main reasons for the high level of carbon emission in the second-largest economy of the world (Zhang & Zhao, 2014). The excessive population of China relies on a higher value-added share of the manufacturing sectors than Pakistan (Imran, Husen, Kaleem, Bangash, & Ud Din, 2020). Therefore, China uses heavy manufacturing capital and has a significantly low ratio of clean capital to dirty capital (Yoon & Yoon, 2018).…”

Heterogeneous analysis of free trade agreement between Pakistan and China: a policy guideline for CPEC

“…This pattern of market supports our results as per Table 3 and points towards the fact that share of Pakistani increases in post-FTA as compared to Chinese market. Labour productivity of Pakistan is becoming more and more stable except for the year 2006 when there was a heavy influx of foreign investments that lead to increase industrial productivity and jobs, Imran et al (2020) as evident from Figure 3 (2006)(2007)(2008)(2009)(2010).…”

“…Additionally, higher number of products at comparatively lower prices will increase the regional consumer utility that further increase migration of labour to the particular region (Imran et al, 2017;Delgado et al, 2010;Pekkala, 2002). Brakman et al (2012) pointed out that more proximity to larger regional markets positively affect domestic wage ratio inside German regions (see Imran et al, , 2020Imran and Rafiq, 2019;Ellison et al, 2010).…”

“…Second, as completion of CPEC will also its impact on the geographical distribution of manufacturing firms and ultimately try to find next best location for their industry or establish a new venture at the new location. Because firm tries to minimise their cost of production where firm tries to find cheaper labour and capital, Imran et al (2020), while to address this issue with a relevant theory this research find Martin and Rogers (1995) "footloose capital model". Third, to analyse the data more accurately this research divide the data into pre-FTA, post-FTA and also analyse the overall performance of the data from 1995 till 2018.…”

Sustainable development via environmental taxes and efficiency in energy: Evaluating trade adjusted carbon emissions

“…These writers offer a strong basis for understanding how commerce and the environment are related. One of the key drivers of CO2 emissions is thought to be international commerce (Gozgor & Can, 2016; Imran et al, 2020; Safi, Chen, et al, 2021; Safi, Wahab, et al, 2021; Wahab, 2020). International trade has accelerated the flow of merchandise and boosted economic activity.…”