From Battlefield to Bull Market: Pakistan’s Economic Adaptation Amid Indo-Pak Conflict and Its Strategic Pivot to China & France

Kalsoom Akhtar, Nosheen Nawaz, Nain Tara and Shazia Kausar

Sustainable Business and Society in Emerging Economies, 2025, vol. 7, issue 2, 323-336

Abstract: Purpose: This study explores the relationship between financial market reactions and geopolitical instability as it relates to Pakistan's paradoxical economic resiliency in the face of ongoing Indo-Pak wars. Despite—or possibly because of—regional tensions, Pakistan's stock market (PSX) may have experienced strong gains, contrary to established beliefs that contend that conflict economies experience capital flight and stagnation.Design/Methodology/Approach: This review paper used a mixed method approach utilizing both quantitative and qualitative data. For quantitative data PSX’s performance reports, macroeconomic indicators data, and defense spending correlation results has been used. Furthermore, qualitative data was based on geographical case studies and policy documents.Findings: Three major foundations of Pakistan's economic adaptation are addressed in this review: (1) The PSX's exceptional volatility and investor behavior in conflict-driven markets; (2) France's growing influence in the defense and technology industries; and (3) China's involvement as a financial and strategic backer through CPEC and bilateral bailouts.Implications/Originality/Value: This study makes the case that Pakistan has created a distinct, if precarious, model of conflict-contingent growth—where crisis-driven alliances and speculative markets momentarily counteract structural weaknesses—by examining macroeconomic trends, changes in foreign direct investment (FDI), and geopolitical alliances.

Keywords: Indo-Pak Conflict; Pakistan Economy; PSX; China-Pakistan Economic Corridor (CPEC); French Technology (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://publishing.globalcsrc.org/ojs/index.php/sbsee/article/view/3392/1875 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:src:sbseec:v:7:y:2025:i:2:p:323-336

DOI: 10.26710/sbsee.v7i2.3392

Access Statistics for this article

More articles in Sustainable Business and Society in Emerging Economies from CSRC Publishing, Center for Sustainability Research and Consultancy Pakistan Contact information at EDIRC.
Bibliographic data for series maintained by Dr Rana Muhammad Adeel Farooq ().