The Impact of Technological Innovation on Manufacturing Exports of Pakistan

Abstract

The aim of this article is to see if technological innovation has an impact on Pakistan’s manufacturing exports? For this purpose, Pseudo-Poison Maximum Likelihood (PPML) estimator with time and importer fixed effects has been applied to study adopted gravity model of manufacturing exports of Pakistan to its 65 major import partners over the period 2011-2018.The results show that technological innovation in both Pakistan and its importing partners positively and significantly affect Pakistan’s manufacturing exports. In addition, the outcomes of this study also confirm that the standard gravity variables are the important determinants of manufacturing exports. This article also adds to the existing literature by examining additional aspects of technological innovation. Second, this paper fills a research gap in Pakistan, as there has never been a study on the association between innovation and manufacturing exports. As a consequence, this study will open new avenues for future research.