The Impact of Volatile Exchange Rate on Commodity Wise Trade of Pakistan to Its Major Trading Partner China: An Empirical Case Study

Ahmer Bilal, Xiaoping Li, Muhammad Zubair Chishti, Minhaj Ali


The current study endeavors to explore the effects of oscillations in exchange rate on commodity wise trade flow between Pakistan and China, employing the data for the time period of 1982-2017. Applying ARDL Bound Testing approach, we find that 63% exporting and 55% importing industries of Pakistan demonstrate the co-integration. Further, employing ARDL technique, the current study deduces that 55% in the short run and 18% exporting industries in the long run respond to the volatility. In imports function, the volatility affects 56% industries in short as well as long run. Intriguingly, two exporting industries coded as 651 (57% share) & 652 (13% share) do not respond to the volatility. And, this is the unique aspect of our study.

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