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An Empirical Analysis of the Linder Theory of International Trade for South Asian Countries

Syed Adnan Haider Ali Shah Bukhari, Mohsin Hassnain Ahmad, Shaista Alam, Syeda Sonia Haider Ali Shah Bukhari and Muhammad Sabihuddin Butt
The Pakistan Development Review
Vol. 44, No. 3 (Autumn 2005), pp. 307-320
Stable URL: http://www.jstor.org/stable/41260627
Page Count: 14
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An Empirical Analysis of the Linder Theory of International Trade for South Asian Countries
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Abstract

This paper presents empirical evidence in support of the Linder theory of international trade for three of the South Asian countries, Bangladesh, India, and Pakistan. This finding implies that these countries trade more intensively with countries of other regions, which may have similar per capita income levels, as predicted by Linder in his hypothesis. The contribution of this research is threefold: first, there is new information on the Linder hypothesis by focusing on South Asian countries; second, this is one of very few analyses to capture both time-series and cross-section elements of the trade relationship by employing a panel data set; third, the empirical methodology used in this analysis corrects a major shortcoming in the existing literature by using a censored dependent variable in estimation.

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