Competitiveness of citrus export and its determinants: a two-way fixed effect panel data model approach

Area of Science:

• Agricultural Economics
• International Trade
• Econometrics

Background:

• Pakistan possesses favorable conditions for diverse fruit cultivation, with citrus being a leading export commodity.
• Citrus significantly contributes to Pakistan's export earnings and national income.
• Understanding export determinants is crucial for enhancing Pakistan's citrus market position.

Purpose of the Study:

• To examine cross-border determinants influencing Pakistan's citrus exports to its top 22 trading partners.
• To apply a gravity model for analyzing factors affecting citrus fruit export.
• To provide insights for Pakistani citrus exporters to improve market access and competitiveness.

Main Methods:

• Utilized a gravity model technique to analyze trade data.
• Employed a panel dataset spanning from 2003 to 2021.
• Applied fixed effect regression with time and country fixed effects for robust estimation.

Main Results:

• Positive associations found between citrus exports and trading partners' per capita income and population.
• Negative impacts on citrus exports identified from citrus price, distance, and exchange rate.
• Trade agreements, including free trade agreements, preferential trade agreements, and SAFTA, significantly boost citrus exports.

Conclusions:

• Economic and geographic factors, alongside trade agreements, are key drivers of Pakistan's citrus exports.
• Addressing identified challenges can enhance Pakistan's citrus export performance.
• Strengthening the agricultural sector through improved export strategies is vital for national income growth.