Impact of Merchandize and Services Trade on Economic Growth of Pakistan

Abstract

Trade comprises both merchandize and services trade. However, the former has over eclipsed the latter. Today services trade has also emerged an important component of international trade. Recent studies show that services trade is rapidly growing which assigns relative importance to services trade in developing economies. This study focused on Pakistan and empirically compared services and merchandise trade for the period 2001-2016. Model-I provided robust results. Merchandised trade has positive and significant impact on economic growth of Pakistan. Trade promotion not only depends on domestic economic conditions but also on favourable global economic scenario. Model-II estimation results are visibly different from that of Model-I. Services trade has negative impact on economic growth. Services exports have remained well below services imports that culminated in negative impact on economic growth. Pakistan policy makers may address the services trade seriously in order take care of adverse services trade balance that could be made possible by exploring weak areas of services exports with emphasis on innovation and information technology development.

The Study of the Spatial Heterogeneity and Structural Evolution of the Producer Services Trade Network

“…As the world economy has presented a trend of transformation from industrial type to being service-oriented, the service industry has become the focus of international trade, among which producer services industry is the most critical branch because it gathers a lot of knowledge and capital [1,2]. Affected by the application of information technology [3,4], the elements of producer services are redistributed in the global market; more countries carry out trade activities as exporters or importers, thus forming a gigantic relationship network of producer services trade.…”