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International competitiveness and ex-ante treatment effects of CPEC on household welfare in Pakistan

Lubna Naz (Applied Economics Research Centre, University of Karachi, Karachi, Pakistan)
Adeel Ali (Applied Economics Research Centre, University of Karachi, Karachi, Pakistan)
Ambreen Fatima (Applied Economics Research Centre, University of Karachi, Karachi, Pakistan)

International Journal of Development Issues

ISSN: 1446-8956

Article publication date: 14 May 2018

Issue publication date: 2 July 2018

396

Abstract

Purpose

This paper aims to presents one of the first direct micro-econometric impact of competitive industries (based on revealed comparative advantage [RCA] between Pakistan and China) on household welfare in Pakistan using semi-parametric matching technique.

Design/methodology/approach

The study has also measured and identified the industrial competitiveness in both agricultural and non-agricultural (manufacturing) industries using RCA approach. RCA at the four-digit ISIC level are matched to household survey data (Pakistan Social and Living Standard Measurement) for 2013-2014 to represent the competitive industries in which the household’s higher earner is employed.

Findings

The findings of the study reveal that the China–Pakistan ex-post treatment effect (industrial competitiveness) provides welfare-improving effects. Furthermore, on this behalf, this study further assesses ex-ante treatment effects of recently signed China–Pakistan Economic Corridor (CPEC) on household welfare and suggests that CPEC would boost further trade liberalization and, therefore, would lead to industrial competitiveness and hence economic growth.

Originality/value

Paper contributes to two streams of literature. First, it measures and identifies the industrial competitiveness in both agricultural and non-agricultural industries using RCA approach; and second, it assesses the welfare of those households associated with these industries using semi-parametric propensity score matching technique.

Keywords

Citation

Naz, L., Ali, A. and Fatima, A. (2018), "International competitiveness and ex-ante treatment effects of CPEC on household welfare in Pakistan", International Journal of Development Issues, Vol. 17 No. 2, pp. 168-186. https://doi.org/10.1108/IJDI-05-2017-0100

Publisher

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Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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