An Empirical Evaluation of Intra-Bloc and Extra-Bloc Export Flows: A Study of Select South Asian Economies

The present study examines the export determinants for South Asian region with a major focus on intra-bloc and extra-bloc trade flows over the period of 1991-2022. For capturing the impact of intra-regional bloc flows, the study incorporates intra-SAARC as explanatory variable. To study the extra-bloc export association, the study includes SAARC-APTA and SAARC-ASEAN as explanatory variables. Results for intra-SAARC bloc variable suggested that the South Asian bloc has failed to boost trade opportunities among South Asian economies. However, the results for SAARC-ASEAN and SAARC-APTA extra-bloc were found to be positive and significant indicating extra-bloc trade facilitation. Lack of trade opportunities among South Asian economies might have encouraged SAARC countries to look for East and South-East Asian trading partners. Moreover, policy initiatives to strengthen economic, cultural, and strategic relationships with East and South-East economies of Asia would have contributed to such realignment of trade towards ASEAN and APTA economies.