TRADE LIBERALIZATION IMPACT ON PAKISTAN’S IMPORT: THE ECONOMETRIC EVIDENCE

Abstract

Utilizing the alternative econometric tools, this study analyzed for the impact of trade liberalization on Pakistan’s real import demand during the period of 1981-2010. Whereby extend the standard import demand by including import duties ratio and alternative dummies for high liberalization episodes. In results provide new trade elasticity estimates i.e. real income of the country follows by relative import prices largely explains the country’s demand for imports with expected positive and negative signs respectively. Further, depicts that reforms in trade policy in favour of trade liberalization has encouraged significantly Pakistan’s imports demand during the period.