Abstract
This article empirically examines the determinants of trade development for South Asian countries over the period 1980–2010 using panel analysis. The result of unit root indicates that all the variables are appropriate for panel cointegration. The panel cointegration test reveals long-run relationship between trade ratio and its determinants. The panel fully modified ordinary least squares (FMOLS) long-run coefficients indicate that per capita income growth, trade liberalization, human capital, financial and infrastructure development have played a major role in influencing trade growth in South Asia.
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