Issue

Vol. 3 No. 1 (2026): January

Copyright (c) 2026 Waheedullah Hemat, Jawed Ahmad Shahidi , Hekmatullah Haqyar

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Panel Data Analysis of International Trade and Its Influence on Economic Growth in Selected South Asian Countries

https://doi.org/10.62810/jssh.v3i1.99
Waheedullah Hemat
Kabul University, Department of Finance and Banking, Economics Faculty, Kabul, AF
Jawed Ahmad Shahidi
Kabul University, Department of Finance and Banking, Economics Faculty, Kabul, AF
Abdullah Nael
Kabul University, Department of Management and Business Administration, Economics Faculty, Kabul, AF
Hekmatullah Haqyar
Kabul University, Department of Management and Business Administration, Economics Faculty, Kabul, AF

Corresponding Author(s) : Waheedullah Hemat

waheedhemat@ku.edu.af

Journal of Social Sciences and Humanities, Vol. 3 No. 1 (2026): January

Abstract

This research investigates the Influence of International Trade on economic growth in selected South Asian Countries: Afghanistan, Bangladesh, India, and Pakistan (2002–2020). The study considers total trade, the exchange rate, and population as explanatory variables, while GDP serves as the dependent variable. To analyze the data, panel data methods, including Pooled Ordinary Least Squares (OLS), Fixed Effects, Random Effects, and the Hausman test, were employed. The Hausman test indicates that the Fixed Effects model is the most appropriate for the data. Empirical findings demonstrate that both trade openness and population positively and significantly influence economic growth, whereas the exchange rate negatively affects growth. Given these findings, the study recommends that governments of the selected countries prioritize export-oriented strategies to stimulate growth. Furthermore, establishing free trade zones to enhance regional trade and implementing policies to manage and stabilize the real exchange rate are advised. These measures are expected to reinforce economic performance both at the country level and across the South Asian region. Additionally, this study contributes to the existing literature by providing updated empirical evidence from four strategically important South Asian economies using a comprehensive panel data framework. The findings offer valuable insights for policymakers, development institutions, and economic planners seeking to design effective trade and macroeconomic policies. By identifying the relative roles of trade, population, and exchange rate dynamics, the study enhances understanding of the mechanisms through which international integration influences growth in developing economies. The results emphasize that sustained economic development in South Asia depends not only on expanding trade volumes but also on maintaining macroeconomic stability and strengthening institutional capacity.

Keywords

Economic Growth Exchange Rate Panel Data Analysis South Asia Trade Openness
Hemat, W., Shahidi , J. A., Nael, A., & Haqyar, H. (2026). Panel Data Analysis of International Trade and Its Influence on Economic Growth in Selected South Asian Countries. Journal of Social Sciences and Humanities, 3(1), 222–234. https://doi.org/10.62810/jssh.v3i1.99
Download Citation
Endnote/Zotero/Mendeley (RIS)
BibTeX
References
  1. Asian Development Bank. (2009). Study on intraregional trade and investment in South Asia. Asian Development Bank.https://www.adb.org/publications/study-intraregional-trade-and-investment-south-asia
  2. Adu-Gyamfi, G., Nketiah, E., Obuobi , B., & Adjei, M. (2020). Trade Oppennes, Inflation, and GDP Growth: Panel Data Evidence from Nine (9) West Africa Countries. Open Journal of Business and Management, 314-328. https://doi.org/10.4236/ojbm.2020.81019 DOI: https://doi.org/10.4236/ojbm.2020.81019
  3. Aremo, A. G., & David, A. O. (2021). Effect of Trade Openness and Financial Openness on Economic Growth in Sub-Saharan African Countries. African Journal of Economic Review, 109-130. https://doi.org/10.22004/ag.econ.308768
  4. Brueckner, M., & Lederman, D. (2015). Trade Openness and Economic Growth: Panel Data Evidence from Sub-Saharan Africa. Wiley on behalf of The London School of Economics and Political Science , 1302-1323. Retrieved from https://doi.org/10.1111/ecca.12160 BRUECKNER, M., & LEDERMAN, D. (2015). Trade Openness and Economic Growth: Panel Data Evidence from Sub-Saharan Africa. Economica, 1302-1323. doi:10.1111/ecca.12160 https://doi.org/10.1111/ecca.12160 DOI: https://doi.org/10.1111/ecca.12160
  5. Chowdhary, R., & Joshi, I. (2022). ECONOMIC GROWTH AND TRADE OPENNESS: A CASE OF ASEAN 9. Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, 31(2), 3-14. https://www.iki.bas.bg/Journals/EconomicStudies/2022/2022-2/1_Isha-Joshi.pdf
  6. Cinar, M., & Nulambeh, N. A. (2018). Foreign Direct Investment, Trade Openness and Economic Growth: A Panel Data Analysis for Sub-Saharan Africa. Business and Economics Research Journal, 749-760. https://www.berjournal.com/foreign-direct-investment-trade-openness-and-economic-growth-a-panel-data-analysis-for-sub-saharan-africa DOI: https://doi.org/10.20409/berj.2018.136
  7. Dushni Weerakoon, J. T. (2008). The South Asian Free Trade Agreement: Which Way Forward? Journal of South Asian Development, 135-149. https://doi.org/10.1177/097317410700300106 DOI: https://doi.org/10.1177/097317410700300106
  8. Faheem Ur Rehman, A. A. (2020). Does infrastructure increase exports and reduce trade deficit? Evidence from selected South Asian countries using a new Global Infrastructure Index. Journal of Economic Structures. DOI: https://doi.org/10.1186/s40008-020-0183-x
  9. doi: https://doi.org/10.1186/s40008-020-0183-x
  10. Iqbal, N., & Nawaz, S. (2016, March 19). Why has SAFTA failed to boost the Pakistan–India trade? Retrieved from EAST ASIA FORUM: https://www.eastasiaforum.org/2016/03/19/why-has-safta-failed-to-boost-pakistan-india-trade. https://www.eastasiaforum.org/2016/03/19/why-has-safta-failed-to-boost-pakistan-india-trade.
  11. Kong, S., Cui, W., & Wang, H. (2022). The Influence of Trade Openness on Economic Growth Based on the Experience of Asian Developing Countries. Journal of Pharmaceutical Negative Results, 13(6), 2591-2601. https://doi.org/10.47750/pnr.2022.13.S06.334
  12. Marius-Rzvan Surugiu, C. S. (2015). International Trade, Globalization and Economic Interdependence between European Countries: Implications for Businesses and Marketing Framework. Procedia Economics and Finance, 131-138. doi:10.1016/S2212-5671(15)01374-X DOI:10.1016/S2212-5671(15)01374-X DOI: https://doi.org/10.1016/S2212-5671(15)01374-X
  13. Michael R. Mullen, P. M. (2009). Effects of International Trade and Economic Development on Quality of Life. Journal of Macromarketing, 244-258. doi:https://doi.org/10.1177/0276146709336837 https://doi.org/10.1177/0276146709336837 DOI: https://doi.org/10.1177/0276146709336837
  14. Mizan, A. N. (2019). Trade Openness and Economic Growth - A Panel Data Analysis on Selected Developing Countries From 1998-2017. UNIVERSITY OF APPLIED SCIENCES. https://www.researchgate.net/publication/329896896_Trade_Openness_and_Economic_Growth_A_Panel_Data_Analysis_on_Developing_Countries_from_1998-2017
  15. Nasreen, S., & Anwar, S. (2014). Causal relationship between trade openness, economic growth and energy consumption: A panel data analysis of Asian countries. Energy Policy, 69, 82-91. doi: http://dx.doi.org/10.1016/j.enpol.2014.02.009 DOI: https://doi.org/10.1016/j.enpol.2014.02.009
  16. Nguyen, M.-L. T., & Bui, T. N. (2021). Trade Openness and Economic Growth: A Study on Asean-6. Economies, 113. DOI: https://doi.org/10.3390/economies9030113
  17. doi: https://doi.org/10.3390/economies9030113
  18. OECD. (2010). From Recovery to Sustained Growth Paris, 27-28 May 2010. Paris: Organization for economic co-operation and development.
  19. Oppong-Baah, T., Brempong, Y. T., Amoah, E. O., prempeh , N. A., & Addai, M. (2022). The Impact of trade openness on economic growth: the case of Ghana and Nigeria. Journal of Human Resource and Sustainability Studies, 142-160. Retrieved from https://www.scirp.org/journal/jhrss DOI: 10.4236/jhrss.2022.101010 DOI: https://doi.org/10.4236/jhrss.2022.101010
  20. Raghutla, C. (2020). The effect of trade openness on economic growth:Some empirical evidence from emerging market economies. J Public Affairs. doi: 10.1002/pa.2081 DOI:10.1002/pa.2081 DOI: https://doi.org/10.1002/pa.2081
  21. Razmi, M. J., & Refaei , R. (n.d.). The Effect of Trade Openness and Economic Freedom on Economic Growth: the Case of Middle East and East Asian Countries. International Journal of Economics and Financial Issues , 3, 376-385.https://www.researchgate.net/publication/287580940_The_effect_of_trade_openness_and_economic_freedom_on_economic_growth_The_case_of_middle_east_and_East_Asian_countries
  22. Roy, S. (2016). REVIEW OF TRADE RELATIONS BETWEEN INDIA AND OTHER SAARC NATIONS AND ITS CHALLENGES. Indian History Congress, 77, 799-807. Retrieved from https://www.jstor.org/stable/10.2307/26552709
  23. SAARC. (2020, July 16). Economic Trade And Finance. Retrieved from South Asian Association For Regional Cooperation :
  24. https://www.saarc-sec.org/index.php/areas-of-cooperation/economic-trade-and-finance
  25. Smith, A. (1776). An Inquiry into the Nature and Causes of the Wealth of Nations. Londnon . DOI: https://doi.org/10.1093/oseo/instance.00043218
  26. Tahir, M., & Khan, I. (2014). Trade openness and economic growth in the Asian region. Journal of Chinese Economic and Foreign Trade Studies, 7(3), 136-152. DOI:10.1108/JCEFTS-05-2014-0006 DOI: https://doi.org/10.1108/JCEFTS-05-2014-0006
  27. WDI. (2022, 12 30). World Bank. Retrieved from World Development Indicators: https://databank.worldbank.org/source/world-development-indicators?l=en
  28. WTO. (2021). WORLD TRADE REPORT 2021. Geneva: World Trade Organization.
  29. Kenton, W. (2023). The history of money: Bartering to banknotes to Bitcoin. Investopedia. https://www.investopedia.com/articles/07/roots_of_money.asp
  30. World Bank. (2018, April 3). Stronger open trade policies enable economic growth for all. https://www.worldbank.org/en/results/2018/04/03/stronger-open-trade-policies-enables-economic-growth-for-all
  31. International Monetary Fund. (2016). The role of infrastructure/logistics in inclusive growth. https://www.imf.org/external/np/seminars/eng/2016/capdr/pdf/session4-JLGuasch.pdf
  32. World Trade Organization. (2021). Trade profiles of landlocked developing countries. https://www.wto.org/english/res_e/booksp_e/06_landlocked2021_chapter_6_e.pdf
  33. South Asian Association for Regional Cooperation. (n.d.). About SAARC. https://www.saarc-sec.org/index.php/about-saarc/about-saarc
  34. World Economic Forum. (2020, June 9). The ongoing impact of COVID-19 on global supply chains. https://www.weforum.org/agenda/2020/06/ongoing-impact-covid-19-global-supply-chains/
  35. World Bank. (2023, February 12). Trade has been a powerful driver of economic development and poverty reduction. Links
Read More
Author biographies is not available.
Received 2025-05-08
Accepted 2026-01-26
Published 2026-01-31
Download
PDF
Statistic
Read Counter : 62 Download : 22