Economic Growth, Financial Development and International Trade: The Evidence of Pakistan's Preferential Trade Agreements

Abstract

 This study analyzes the link between financial development, economic growth and international trade in case of Pakistan over period 1972-2016 by applying Johansen co-integration and granger causality. This study also checks the benefits of all free trade agreements of Pakistan by using panel regression analysis. The outcomes of the study suggest that there is great link exist between all economic indicators. Financial developments have an effect on the trade openness and afterwards such trade liberalization improves the GDP growth. All FTA/PTA have positive impact on Pakistan's trade and Pakistan economy. Both partners can get more and more benefits from these agreements.