Abstract:
E-commerce has become a critical part of international trade as it provides online
platforms to facilitate buyers and sellers across the world. However, the extent to
which countries utilize e-commerce for export purposes can vary due to a range of
factors. This study aims to analyse the impact of e-commerce on Pakistan's bilateral
exports using the extended stochastic frontier gravity model of international trade. By
analysing panel data from 60 countries over the period of 2003 to 2022, the research
examines the influence of determinantal factors such as GDP, distance, e-commerce
adoption, regulatory quality, infrastructure, digital literacy and bilateral exchange
rates. Moreover, the study incorporates border effect and common language as
dummy variables to assess their impact on bilateral trade flows. The result reveals
positively significant effect of e-commerce on Pakistan’s export. It also shows
positive impact of infrastructure and digital awareness on exports. However,
regulatory quality and common language are insignificant. This research also
estimates the export potential of Pakistan with its trading partners. It also reveals that
Pakistan needs to minimize its trade gap with major neighbouring countries for
potential economic growth. The study highlights areas where Pakistan can improve to
boost its export performance.
