Impact of Globalization on SMEs Export Business and Economy of Pakistan by Using CGE Model

  •  Anwar Ali Shah G.Syed    
  •  Khalid Hussain Shaikh    
  •  Tariq Mehmood    
  •  Tahira Afridi    
  •  Faiz Muhammad Shaikh    


This research investigates the Globalization impact on the SMEs export by using Computable General Equilibrium model. The main objectives of this research are to provide detailed overview of economic reforms in the last decade by using the General Equilibrium Model. Data were collected from 300 SMEs business exports in Pakistan by using simple random technique. Structural questionnaire is used as a basic tool for measuring export potential. Data from developing countries were collected through secondary sources and data were analysis by using Gem-Software. It was revealed that from last decade, globalization has positively revolutionized the SMEs export business the economy of Pakistan. The Global trade analysis Purdue (GTAP) model is used to analyze the possible impact of Globalization on Pakistan’s economy in a multi-country, multi-sector applied General Equilibrium frame work. After employing the simplified static analysis framework based on simulations reveal that Globalization and FDI have influenced positively on the economy of Pakistan. The general inflation rate is decreased and living standard is increased in urban areas. Employment opportunities are also increasing due to the investment made by the FDI and as for as cultural context is concerned, Pakistani people are more reluctant to reduce the traditional cultural barriers. On the contrary side, other consumer items like leather-made and cotton-made garments will expand after the FTA and consumer surplus will increase. This perspective enables us to identify new challenges in the global economy and to identify the multiple routes through which power and resource inequalities are reproduced within it. More positively, it helps to identify new opportunities and routes to challenging these inequalities. The application of this perspective to the impact of the rapidly-growing economy in real increase in terms of trade.

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