Have Covid-19 Changed The Trade Gravity Of Pakistan?
Author: Zahra Arshad

Pakistan’s trade is concentrated to few destinations and in few products. Exploring new trade markets has always been a point of concern to the policy makers. The outbreak of pandemic COVID-19 has disrupted trade among many countries, it has also created trade opportunities for the countries where disease condition was not worst. The low-high influence of pandemic has changed the gravity of trade between many countries. It forced countries to find new markets for their exports and imports. This study aims to examine the changing trade gravity during pandemic in Pakistan with bilateral countries such as Turkey, Bangladesh, South Africa, Kenya, Madagascar, Egypt, Tanzania, Brazil, Spain, France, Japan, India, Italy, China, Australia, Germany, United Kingdom, United States of America, and Switzerland for the span of 2018-2020. We use monthly panel data and fixed effect model to analyse the trade export and import across the countries and products. Death and confirmed cases show negative impact on total bilateral exports, and death cases along with infection rate exhibits negative impact on total imports. The momentum of contacting virus and ban on international flights shows negative effects on total exports. While the lockdown proxies show insignificant effect on total imports. On one hand, death cases show negative and significant effect on the bilateral exports of manufacturing group, metallic group, miscellaneous group, and pharmaceuticals. On the other hand, confirmed cases shows significant and negative impact on bilateral imports of metallic group and miscellaneous group. Whereas death cases exhibit negative impact on bilateral imports of primary food group and processed food group. Lockdown proxies such as contact tracing negatively shows effects on primary food group exported from Pakistan. International flights ban shows negative repercussions on the metallic groups exported from Pakistan. The momentum of contact tracing has negative and significant effect on the pharmaceuticals and manufacturing group imported to Pakistan. Overall, it is deduced that COVID-19 hit the bilateral exports the most as compared to total bilateral imports. Because the variable of lockdown situation in Pakistan is significant and negatively related to total exports. Supervisor:- Dr. Naseem Faraz

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Supervisor: Naseem Faraz

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