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

Abstract

Pakistan has a conducive condition for the development of a wide range of scrumptious fruits. As a result, the country grows a diverse assortment of tropical and subtropical fruits; the most prized and top-ranked fruit among all fruits grown in Pakistan is citrus. Citrus is the principal fruit that contributes significantly to Pakistan’s export earnings and national income. In this study, the cross-border determinants influencing Pakistan’s citrus exports to its topmost 22 trading partners are examined using a gravity model technique. This is the first large study from Pakistan by using gravity model to check the impact of various cross-border factors on citrus fruit export. The analysis is based on a panel dataset covering the years 2003 to 2021. To estimate the results, the study used fixed effect regression with time and country fixed effects. The results signify that per capita income, population, and some regional dummies are positively associated with citrus exports from Pakistan. Citrus price, distance, exchange rate, and other regional dummies are observed to have an adverse effect on citrus exports. Trade agreements between Pakistan and trade partners such as free trade agreements, preferential trade agreements, and SAFTA, have been observed as important determinants of citrus exports. Citrus exporters in Pakistan can also benefit from understanding the factors that influence export markets. By addressing the challenges identified in this study, Pakistan can enhance its citrus exports and boost its agricultural sector.