MAPPING TRADE SHIFTS: UNDERSTANDING THE DETERMINANTS OF EXPORT DIVERSIFICATION IN BRICS AND PAKISTAN

Abstract

The present study aims at highlighting the determinants of export diversification is Brazil,Russia,India,China,South Africa (BRICS) and Pakistan. Empirical analysis is done on panel data of BRICS and Pakistan for the years 1996 to 2022.For empirical analysis Generalized Method of Moment (GMM) is used. Hausmantest is used to suggest the fixed effect or random effect model. Resultsrevealed on the basis of selected determinants.Resultsof term of trade, official exchange rate, globalization, GDPper capita,worldGDPand foreign direct investment exhibitedpositive effect on export diversificationin case of BRICS and Pakistan. The term insignificant does not mean that these variables do not affect exportdiversification because some variables showed insignificant effect. It means that these positively associated determinants can play a key role in order to boost up the export diversificationin case of BRICS and Pakistan. Whilepolitical stability and gross fix capital formationshows negative which is quite debatable. It means that those countries which have a negative fiscal and trade balance do not benefit from the diversificationof exports. Before entering export diversificationthese countries need to be financially stable in case of trade by promoting exportable goods.