Dynamics of Exports and Economic Growth at Regional Level: A Study on Pakistan’s Exports to SAARC

It is well recognized in literature that countries having a better export performance also enjoying the better economic growth and vice versa. Above said statement raises a striking question; is the economic growth (GDP) and exports having strong linkages? The aim of present study is to test the above said question at regional level exports, especially in context of Pakistan’s exports to South Asian Association for Regional Cooperation (SAARC) to gauge the effectiveness of regional trade agreement. Study contributes literature in terms of regional level exports to test “economic growth and exports” relationship. Results revealed that Johansen cointegration test failed to affirm long run relationship between GDP and Pakistan’s exports to SAARC, hence, short-term relationship exist. Granger causality revealed unidirectional nature of causality from GDP to Pakistan’s exports to SAARC. The regulatory authorizes of developing nations should focus on the measures to improve their economic growth to gain the benefits from Regional Trade Agreements (RTAs).