International competitiveness and ex-ante treatment effects of CPEC on household welfare in Pakistan

Abstract

Purpose This paper aims to presents one of the first direct micro-econometric impact of competitive industries (based on revealed comparative advantage [RCA] between Pakistan and China) on household welfare in Pakistan using semi-parametric matching technique. Design/methodology/approach The study has also measured and identified the industrial competitiveness in both agricultural and non-agricultural (manufacturing) industries using RCA approach. RCA at the four-digit ISIC level are matched to household survey data (Pakistan Social and Living Standard Measurement) for 2013-2014 to represent the competitive industries in which the household’s higher earner is employed. Findings The findings of the study reveal that the China–Pakistan ex-post treatment effect (industrial competitiveness) provides welfare-improving effects. Furthermore, on this behalf, this study further assesses ex-ante treatment effects of recently signed China–Pakistan Economic Corridor (CPEC) on household welfare and suggests that CPEC would boost further trade liberalization and, therefore, would lead to industrial competitiveness and hence economic growth. Originality/value Paper contributes to two streams of literature. First, it measures and identifies the industrial competitiveness in both agricultural and non-agricultural industries using RCA approach; and second, it assesses the welfare of those households associated with these industries using semi-parametric propensity score matching technique.

China-Pakistan Economic Corridor and Its Influence on Perceived Economic and Social Goals: Implications for Social Policy Makers

“…People perceive that job opportunities (created through CPEC) will reduce poverty among the people. Hence, CPEC can be a significant predictor of poverty reduction [22]. Local people expect numerous job opportunities and high earning position via CPEC, which can mitigate their poverty [31].…”

“…The local communities could be eased out through these initiatives if they bring some positive changes to their personal and social, and economic wellbeing [21]. CPEC will directly or indirectly affect the households' welfare through up surging industrial growth and competitiveness [22]. Favoring this notion, Ali et al [14] claimed that CPEC is an emerging factor that can boost the progress of several industrial (SMEs, export and import) and non-industrial (education and health) zones, which have a significant multi-dimensional influence on local communities' lives.…”

China-Pakistan economic corridor and its impact on rural development and human life sustainability. Observations from rural women

“…However, CPEC can be the best source of attaining these goals if the policies are configured effectively for social, economic and environmental goals [1]. In terms of social benefits for community people, Naz, Ali [10] argued that CPEC would facilitate small businesses due to radical reduction in the logistic costs and time through the provision of better infrastructure for efficient transportation of goods. Moreover, it would create new employment opportunities for local communities, enhance industrial competitiveness for the local businesses and ultimately boost economic growth.…”

The Sustainable Development of the China Pakistan Economic Corridor: Synergy among Economic, Social, and Environmental Sustainability

“…[35] It is a matter of fact that the CPEC would facilitate trades that were time-saving and cost-effective in terms of transportation, and an improved road and rail network-through which commodities would directly approach China. Furthermore, it would raise services opportunities and increase business competitiveness, thus leading to economic escalation [2]. Around the globe, in the current century, development in global and regional strategies has been directed toward geo-economical and geostrategic corporations amongst countries.…”

“…Furthermore, the primary vision of the CPEC is to supply better communication and transportation, and to improve amalgamation in the global marketplace in a short time frame, in order to advance industrial competitiveness. On the other hand, through industrialization in Pakistan, employment opportunities will be greatly increased in a highly unemployed workforce [2]. Since the 1960s, the Pak-China friendly tie has improved consistently, and now both of the nations are benefiting from solid relationships.…”