Abstract
This paper aims to estimate the impact of different factors of basmati exports from Pakistan to its trading partner. Results are obtained by using the Generalized Method of Moments (GMM) model and panel data methodology with a sample of 22 countries for the period of 2003-2019. To estimate the impact of different variables on basmati exports Generalized Method of Moments (GMM) model is used on the panel dataset. The results revealed that the inflation rate of Pakistan has a negative and significant effect on the export competitiveness of Pakistani basmati. The exchange rate of Pakistan has a positive and significant impact on the basmati export, the population of Pakistan has a negative and significant impact on basmati export. Basmati production in Pakistan also has a significant and negative impact on basmati export. The Gross Domestic Product (GDP) of Pakistan has a significant and positive impact on the basmati export while the GDP of the trading partner has a significant and negative impact on the basmati export. The dummy variable for joint border also has a positive and significant impact on basmati exports of Pakistan.
Highlights
The agriculture sector is the backbone of Pakistan's economy
In order to examine the determinants of basmati exports from Pakistan to its trading partners, a Generalized Method of Moments (GMM) model was applied, by following Hillier et al (2011)
The dependent variable basmati export from Pakistan to its trading partner, the exchange rate of trading partner, and exchange rate of Pakistan are stationary at 1st difference
Summary
The agriculture sector is the backbone of Pakistan's economy It contributes 18.9 percent to the National GDP (Gross Domestic Product), and 43.5 percent to the National labour force (GoP, 2020). Rice has much importance in the agricultural sector of Pakistan because it is the main food as well as one of the major cash crops. Rice is the second main staple food crop after wheat and the second major exportable crop after cotton It contributes 3.1 percent in the value addition of agriculture while 0.6 percent in the GDP of Pakistan. Panel data about 22 countries were selected on the basis of the exported value of basmati rice from Pakistan which is the major source of earning from basmati export as export values in 000 USD
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