Exploring Product Diversification Opportunities In Pakistan For Export Growth
Author: Abu Bakar Sadiq

Diversification brings economic growth and more diversified production structure in any developing country. Pakistan is now committed to diversify its export growth and trying to address the issue in its trade policy. The purpose of this study is two-fold: attempting to decompose product exports and measure the significance of intensive, extensive, and new products towards the export growth. The study finds the long run association of GDP per capita and the three indices of export product diversification i.e., product diversification (Theil index), intensive margin and extensive margin. Furthermore, this study also done the current scenario of Pakistan’s export and trade policy review. A qualitative aspect is covered by performing a survey from the experts selected from Ministry of Commerce, SDPI, PIDE, and NUST. By selecting the top five exporting countries, the main objective was achieved by using the (Freund 2008) methodology while for the accomplishment of the second objective this study used ARDL Bound testing procedures on timeseries. Hence, the results obtained showed positive export growth for the overall period of 2009-2020, except for household products. The intensive margin contribution to the export growth was significant in case of 26, 84 and 85 divisions products. However, in the main subsector of textile (65 division) the contribution from the new products is large and more significant compared to other sub-sectors. The household appliances showed a negative export growth. The results of Bound test confirmed the positive and significant long run relationship among GDP per capita, product export diversification, extensive and intensive margins. The study recommends that government should focus on the diversification of their traditional and new product exports with investment and innovation. Moreover, attention to the innovation in textile & apparel sector is recommended. Sports industry, Medical & engineering equipment, and household appliance industry has potential and can be given boost through timely investment and strong policy formulation. Supervisor:- Dr. Uzma Zia

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Supervisor: Uzma Zia

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