An Empirical Analysis of Gain and Losses of Bilateral Trade Agreements of Pakistan

Evaluation of Pakistan's realized and unrealized trade potential and its consequences for economic development, is the prime objective of the study. Gravity model is applied to examine the link between growth and the trade volume between countries. Panel data is used to conduct studies with 38 trading partners of Pakistan for the periods of 1990, 1995, 2000 and 2005. The result of our study shows that there is a constructive relationship exists between trade volume and multiplied of the economic size of countries and variable of distance between countries shows a negative relationship with trade volume.