TRADE LIBERALIZATION AND ENVIRONMENTAL ISSUES IN PAKISTAN

ABSTRACT: This research is an exertion to empirically make an assessment and confirmation about the relationship between trade advancement and environmental features in Pakistan. Time series data covering the span of 1975-76 to 2014-15 have been utilized to carry out the analysis. Trade, FDI, GDP, and taxes on trade are taken as independent variables while CO₂ emission is endogenous variables and taken as a proxy of the environment. ADF test has been used to test the order of integration. Auto-Regressive Distributed Lag Bound-testing approach is utilized to estimate the cointegration relationships. Breusch-Pagan heteroscedasticity test and Breusch-Godfrey serial correlation test are employed to test the problem of autocorrelation and heteroscedasticity. Cumulative sum of square test has been employed to check the stability of the model.