Gender Inequality and Exports Diversification in Pakistan: An Empirical Investigation under Endogeneity

Abstract

This study empirically investigates the relationship between gender inequalities and exports diversification in Pakistan over the period from 1982 to 2016. Gender equality is critically important for the moral obligation and the economic fundamentals. Gender equality also provides vital support for exports diversification which is very important for the economy to achieve economic transformation and inclusive growth. This study has measured the gender inequality index by using the methodology of World Bank in World Development Report and export diversification is measured by Thiel index. The econometric methodology of instrumental variable generalized method of moment (IV-GMM) regression provides the robust estimates which confirm that the gender inequality, term of trade, gross domestic product per capita, trade openness and demographic factors are the long run determinants of exports diversification in Pakistan. The results are supported with standard diagnostic tests to confirm the significance of the research decision. Previously several studies empirically investigated the relationship between gender discrimination and economic growth but there was only little evidence about the relationship between gender inequalities and export diversification so it would be the productive contribution to the existing literature regarding the issue of gender inequality and diversification in Pakistan. The findings of the study are in line with existing literature on the subject which confirms a negative and significant impact of gender inequality on exports diversification. The study suggests that the gender inequality along with macroeconomic variables like term of trade, real effective exchange rate, trade openness and demographic factors must be considered while designing and implementing policies regarding diversification.