AN EMPIRICAL ANALYSIS OF THE INFLUENCING FACTORS OF FOREIGN TRADE IN PAKISTAN: BASED ON THE GRAVITY MODEL

The major goal of this research was to use the gravity model to assess the impact of numerous factors on Pakistan's world trade with other countries. The research was carried out over a fifteen-year period, with data being analyzed from 2005 to 2019. The elements that determine the volume of commerce from Pakistan to other nations have been identified as gross domestic product, per capita GDP, trade to GDP, inflation, and distance. Pakistan's trading ties with Afghanistan, Turkey, Iran, Kazakhstan, China, and India were taken into account for this analysis. According to the study's findings, per capita GDP has a significant impact on trade volume with Pakistan. Demonstrating that the GDP per capita of the trading countries and Pakistan were comparable. The effect of distance was also found to be significant and negative, indicating that increased distance reduces trade volume. The results of the second model revealed that GDP dimensions, inflation, and distance had a significant impact on Pakistan's export volume. The study also proposes some academic and policy implications