EFFECTIVENESS OF EXPORT REFINANCE AS AN EXPORT SUPPORT POLICY

Abstract

This thesis assesses a long standing export support program in the form of the Export Refinance Scheme (EFS) by the State Bank of Pakistan and provides context in terms of theories and practical experiences of the various export support policies. An in depth overview of recent trends in the scheme reveals no significant value addition in the exported commodities and a concentration of the financing to small number of large enterprises. Time series analysis using the Autoregressive Distributive Lag Bounds Testing Approach, as propounded by Pesaren and Shin in 1997, reveals that the subsidy element of the scheme has a negative association with real export growth. The literature as well as the analysis suggests that the scheme requires amendments to the blanket coverage it provides—barring a short negative list—by identifying the problems faced by each sector and making more idiosyncratic solutions. JEL Classification: F13, F14, G21