DefinePK

Abstract

The study tried to identify main determinants of exports between Pakistan and SAFTA countries byapplying the gravity model of trade. Panel data were used from the period 2003 to 2016. Theindependent variables include GDP, GDP per capita, distance, border, and inflation to investigatetheir impact on trade patterns. The Multiple Regression models were applied. The results suggestedthe gravity model fits into data reasonably well and Pakistan's GDP, distance, and border showed asignificant negative relationship with trade patterns of SAFTA countries. Whereas inflation and percapita GDP showed a significant positive relationship with trade patterns between Pakistan andSAFTA countries. This work has tried to apply theoretical concepts and empirical analysis to add tothe limited literature already available. The results suggest significant potential in SAFTA regions forPakistan, which is still untapped. This suggested a development of liberal trade policies, decreasingNon- tariff barriers to increase trade within the region.