How has the duty drawback policy impacted the exports of surgical goods from Pakistan?

Abstract

Objective:

The Government of Pakistan, through its SRO No. 711(1)/2018 introduced the Duty Drawback scheme to increase the exports from the country. This research gauges the effect of the Policy of Duty Drawback scheme on exports of particular surgical goods from Pakistan.

Research Gap:

Most of the research on the Duty Drawback Scheme has covered its impact on a country's exports holistically, failing to measure the impact at the microenterprises level, like small and medium-sized enterprises. However, unprecedented to others, this research has gauged the impact of duty drawbacks on a specific small and medium sector i.e. surgical sector of Pakistan.

Design/Methodology/Approach:

To gauge the effectiveness of the Duty Drawback Scheme, the research utilized the Difference in Difference (DID) estimation technique and the inverse weight of propensity score using Firthlogistic regressions. For estimation used panel data for each of these 51 surgical goods pooled over 2017 and 2021. These fifty-one surgical goods are classified as treatment groups while others as control groups. The data is fetched from the database of the official website of Trade Map, and International Trade Centre UNCTAD/WTO.

The Main Findings:

The estimation of the research demonstrates that the Duty Drawback Policy has significantly increased the annual exports of treated surgical goods compared to control surgical goods. Thus, the policy has a potential positive influence on increasing the country's exports.

Theoretical/Practical Implications of the Findings:

The outcome of the study reveals that the Duty Drawback Policy provides favorable support for enhancing the exports of surgical goods from Pakistan. Therefore, the policy should be applied to the production of remaining surgical items, as well as to similar manufacturing organizations, to boost the country’s exports.

Originality/Value:

This research provides a line of direction to policymakers for the formulation of future policies and decision-making. Furthermore, the research contributes to the literature for future studies on similar nature topics.