Impact of Export Subsidies on Pakistan’s Exports

Nadeem Ul Haque
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Nadeem Ul Haque: PIDE

Trade Working Papers from East Asian Bureau of Economic Research

Abstract: Throughout Pakistans history, policy has sought to promote exports through government support and incentives. The government machinery is geared to export promotion especially through direct and indirect subsidies. Surprisingly, these policies have been continued without serious examination. This paper makes a first attempt to evaluate these policies by estimating the impact of two such schemesexport financing and rebate/refund schemeson export performance. Our analysis shows that, over the long run, the export financing scheme had a negative effect on exports while the rebate/refund scheme affected exports insignificantly. Subsidy schemes clearly do not seem to work, yet they have been retained for many years.

Keywords: Rebate; Duty Drawback; Export Financing; exports; trade; exchange rate; co-integration; Vector Error Correction; Pakistan (search for similar items in EconPapers)
JEL-codes: C32 F13 F14 F31 (search for similar items in EconPapers)
Date: 2007-01
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Citations: View citations in EconPapers (9)

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