Determinants of Exports from Pakistan: A Time Series Analysis

Abstract

This research study is conducted to find the major determinants of exports and to recommend the proper policies. In this study, six independent variables are used which are Foreign Direct Investment (FDI), Gross Domestic Product (GDP), Gross Domestic Savings (GDS), Nominal Exchange Rate (NER), Gross Capital Formation (GCF), and Labor Force Participating Rate (LFPR). FDI, GDP, and GCF were found significant while GDS, NER, and LFPR were found insignificant. In previous studies the role of FDI remained unclear, some researchers found it positive but insignificant. However, in the present study, it is found positive and significant. Based on the present study, it is recommended that the government should take steps to invite foreign private investors so that FDI can be increased which will increase exports, and due to increased exports foreign reserves will increase, and the balance of payments will be improved.