Pakistan exports have been showing a declining trend. Pakistan
exports have not been only concentrated in trading in few goods but also
exporting to a few countries. This study uses a gravity model of trade and panel
data estimation technique to explain the export trends of Pakistan. Gross
domestic product of the trading partners or economic size of a country (both
GDPs and Per capita GDPs) was found to be a statistically significant
determinant of trade between the countries. Pakistan’s exports are negatively
related to the distance variable. Sharing a border was not found significant for
Pakistan’s exports. Disputes over territory and terrorism related incidents with
India and Afghanistan making a common border as not significantly explaining
the trade. It is suggested that the disputes may be resolved between the
neighboring countries and strengthening the regional trade agreements.
