THE UUNIVERSITY OF LAHORE-GUJRAT

Lahore Business School


Synopsisfor the degree of M.S./M.Phil Ph.D.

PART-1(to be completed by the student)

Name of Student Asmasyed

Department Lahore Business School
Registration No.
Name of (i) Research Supervisor Mr.Mubashir Ali Khan
(ii) Co – Supervisor
Members of Supervisory Committee

1. Ms.IsmaKhatoon
2. Mr.Zubair Ahmad Ch .

Title of Research Proposal “Determinants of Trade Balance “ A study on South Asian

Region

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Summary of Research Proposal
Improvement in the trade balance living standards of people grow up and reduction in the levels of
poverty. Positive balance of trade contributes in the growth of GDP and expansion of foreign direct
investments to promote domestic goods. Even though, some researchers studied different factors
influencing the trade balance of economies by testing different techniques. But there is no specific
study on examining the major determinants of balance of trade of South Asia region. So there is a
direct need to explore empirically macroeconomic key factors influencing the aggregate trade
balance of South Asian Countries and also investigate relationship between the balance of trade
and the possible determinants

Introduction:
.In now a day’s economic assimilation is taking place in throughout the world with an
extraordinary speed. The increase of economic growth throughout the world is just because of the
globalization. Due to globalization many countries and also the citizen of the countries enjoy the
massive economic benefits but the number of been losing the development and opposition to extra
addition is rising for a huge number of reasons. However trade is only the one characteristic of
globalization and also associate with the broader economic, technological, and political forces are
various and multipart.
In the present economic world international trade is essential for the globalization process.
Government of different countries also know the importance of the international trade and they
open their economics doors for the international trade through the joint trading system, increased
regional collaboration or as part of domestic restructuring programs. Globalization and
international trade together bring many benefits for many countries and their citizens and capable
them to enjoy the heavy volume of trade balance. Due to the international trade many countries get
benefits from economic and specialism to create at a more proficient level. Trade also increase the
production level and take part in the flow of technology and knowledge in the country and also
enhance the choice availability for the consumers but due to the extinct incorporation in to the
world economy trade has not accepted renowned all the time or some time globalization and trade
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not access all the sections of society.
The topic of trade state that a variety of connected questions that condition what are the role
trade plays in the world growing economy, what are the challenges, and what are the benefits of
trade. Every country wants to involvement in the trade and in the international trade it’s just
because of that the trade always helpful to increase the economics of the countries and also
developed the countries economics and with the help of this the welfare of the country is also
increase. So these things proves that the there is a strong relationship between the trade and growth
and hence it is not prove that increase in the out of the country exports decrease the trade balance.
All economists believe that due to the encouraging growth effect of trade liberalizations,
there is a discussion has been taken place about the direct deductibility between growth and trade
reforms. Because trades reforms are usually conducted together with other institutional reforms,
many people argue that the connection between trade liberalization and growth might be weaker
than the earliest thinking. However some of few reject that the positive link present. The well-built
connection between the trade and growth is panache between the many by the World Bank, which
concludes that;
“Trade can be a powerful force for growth and poverty reduction. Countries that have increased the
share of trade in their GDP have grown faster and reduced poverty more rapidly”.

Problem Statement:
Improvement in the trade balance living standards of people grow up and reduction in the levels of
poverty. Positive balance of trade contributes in the growth of GDP and expansion of foreign direct
investments to promote domestic goods. Even though, some researchers studied different factors
influencing the trade balance of economies by testing different techniques. But there is no specific
study on examining the major determinants of balance of trade of South Asia region. So there is a
direct need to explore empirically macroeconomic key factors influencing the aggregate trade
balance of South Asian Countries and also investigate relationship between the balance of trade
and the possible determinants.

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The main problem of this study is to investigate the major key factors that affecting the trade
balance and explore whether their influence is positive or negative way on the South Asia countries
balance of trade.
South Asia region, most of the countries have trade deficits from last several years caused by
identical goods produced in the countries and similar export markets normally. Therefore, it is
necessary to examine what are the major key determinants that have impact on trade balance?
Research Questions:
What are the major key determinants that have impact on trade balance whether their influence is
positive or negative way on the South Asian countries?
Significance of the study :
The significance of this research is to provide a better knowledge and understanding of the factors
that affect trade balance and also identify in which point these countries are not doing better so that
more effort and new measures can be taken to increase economic growth which will come by
exporting more and importing less and hence reduce the range trade deficit of these countries and if
possible attain trade surplus.

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Research Methodology
Study Area: The universe of this study will be South Asian countries of the world.
Target Population: South Asian Region
Sample Size: 1980-2015
Data collection: This study will use the annual (secondary) time series data covering the period
between 1980-2015. This period has been chosen because data to be use in the trade balance
function was likely to be available.
Research Strategy:Research strategy refer the ways through which research is carried.
Quantitative method will be implied in this study.
Research Philosophy: Positivism
Research Approach: Deductive approach will be fit for this study.
Research Nature: Explanatory nature.

Data analysis:

For this study researcher will collect times series annual data of South Asian countries over the
period of 1980 to 2015.Additionally, time period of thirty-five years provides a long enough
window to examine the variables effect on trade balance.
Different Econometric Models are used for this purpose. So group of Researchers used Pooled
OLS regression analysis in order to check the impact of Macro-Economic factors on Trade
Balance. Pooled OLS regression is normally employed on the data which contains time series
observations of different countries. World Development Indicator, United States international
macroeconomic dataset and Brueghel Resources will use in compilation of data for the study.

Theoretical FRAMEWORK:

TBt = β0 + β 1REERt + β 2REMt + β 3FDIt + β 4FCEt + β 5FBt + β 6FXRt + µt (1)

TBit = β0i + β 1REERit + β 2REMit + β 3FDIit + β 4FCEit + β 5FBit + β 6FXRit + µit (2)
TBit = β0i + β 1REERit + β 2REMit + β 3FDIit + β 4FCEit + β 5FBit + β 6FXRit + εi + µit (3)

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Approved by Departmental Advisory Committee

Certified that the synopsis has been seen by members of Research Committee and considered it
suitable for putting up to Defense Committee.

Secretary
Departmental Research Committee

Name: Asma Syed_Signature:_________________________

Date:__30-11-2016______________________

Thesis Coordinator ____________________________________

Signature: ______________________________

Date ________________

Tentative Time Table

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 PART II
Recommendation by the Research Supervisor
The synopsis has been developed after thorough research and literature review. Student has clear
idea about the nature of problem and methodology of the research. Hence, the synopsis is
recommended for approval.

Name _____________________ Signature _______________________ Date__________________

Signed by Supervisory Committee

S. # Name of Committee Member Designation Signature and Date

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2
3
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PART III
Approval
Research Coordinator

________________Approved

________________ Not Approved on the basis of following reasons.

Signature ______________________________ Date ________________

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HoD/ Chairman
Remarks

Signature ______________________________ Date ________________

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