Conflicts, Political Distance and Import Volume of Pakistan, a Gravity Model Estimation

Abstract

Purpose: This article, analyze causal relation of conflicts, political distance and Pakistan's import flows. The severity of interstate military conflicts is higher between Pakistan and India. While the animosity and chauvinism between Pakistan and India increase the intensity of both armed and verbal conflicts. Comparing interstate-armed conflicts and interstate military verbal conflicts, the former has more severity than later.
 Methodology: The Gravity model is used to analyze the relationship between conflicts, political distance and Pakistan's import volume. The panel data consist on 171 countries and 1980 to 2013time period. Findings: Conflict between Pakistan and India, the interstate-armed conflicts are less impactful than interstate military verbal conflicts on import volume. The other important finding is the changing role of political distance. Political distance significantly reduces Pakistan's import volume when we regress interstate military conflicts and political distance between Pakistan and its importing partners. Interstate military conflicts between Pakistan and India and political distance between Pakistan and its importing partners show less intensity to reduce Pakistan's imports.
 Implications: Pakistan replaced the United States of America with China as major partners that share a significant proportion of its import market due to close political preferences. At the same time, there was no significant trade between Pakistan and India because both countries indulge in military conflicts.