31 Years Intra-Industry Trade of Pakistan

Abstract

This study investigates intra-industry trade (IIT) of Pakistan for 31 years with eleven selective major trading economies and country-specific determinants of IIT of Pakistan using gravity model. OLS technique is used on panel data of 341 observation and UN COMTRADE and World Development Indicator (WDI) as data source the result shows 24.93% of IIT of Pakistan with its selective trading partners and R-square is 88%. This study provides 31 years average levels of IIT of Pakistan, both one-digit SITC commodity wise and country wise. More specifically the average levels are of three decades, first 1982 to 1991, second 1992 to 2001 and third 2002 to 2012. Results are highly significant and are as expected. Commodity wise the highest IIT level was found to be in Crude materials, inedible, except fuels (SITC-code 2), within this Pakistan IIT with Kuwait reported to be 80%. While Country wise highest IIT level of Pakistan is with Singapore.  This study suggests specific strategy proposal for the encouragement of IIT of Pakistan.

Keyword(s): Intra Industry Trade (IIT), Standard International Trade Classification (SITC)