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All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system or transmitted in any form or by any means—electronic, mechanical,
photocopying, recording or otherwise—without prior permission of the author and or the
Pakistan Institute of Development Economics, P. O. Box 1091, Islamabad 44000.
© Pakistan Institute of Development
Economics, 2012.
Pakistan Institute of Development Economics
Quaid-i-Azam University Campus
P. O. Box 1091, Islamabad 44000, Pakistan
E-mail: [email protected]
Website: http://www.pide.org.pk
Fax: +92-51-9248065
Designed, composed, and finished at the Publications Division, PIDE.
EXPORT BARRIERS IN PAKISTAN: RESULTS FROM FIRM LEVEL SURVEY
JULY 2012
PAKISTAN INSTITUTE OF DEVELOPMENT ECONOMICS
ISLAMABAD
CONTENTS
Page
Acknowledgements v
1. Introduction 1
2. The Conceptual Framework 3
2.1. The Survey and Questionnaire 4
3. Key Findings of the Survey 7
Reasons for Shortage of Skilled Labour 8
Reduction in Cost if Labour Becomes Productive 9
Duration of Finance 9
Importance of Location 10
Fuel (Electricity and Gas) as a Percentage of
Total Cost 10
Problems Related with Electric Supply 11
Activities and Problems Currently Faced in Exporting
Pre-Shipment Activities 11
Inland Carriage and Handling 12
Customs Clearance 12
Customs Release 13
International Carriage and Handling 13
System of Certification 14
Certification to the Standards/Preparation for
Certification 15
Agreements and Negotiations 15
Effect of Agreements on Business 16
Perception about On-going Dialogues 16
Use of Transportation Mode for Shipment 17
Perception about Efficiency of Institutions 17
Effect of Hindrances on Firms’ Cost 18
Reasons for Failure of Business 18
Quality of Trade Logistics 19
(iv)
Page
Major Constraints to Improving Trade Logistic
Environment 19
Perception about Policy Recommendations 20
Reduction in Cost if Proposed Solutions are
Implemented 20
Regional Distribution as Destination of Exports
4. Summary and Conclusions 21
Appendices 22
References 37
List of Tables
Table 2.1. Ranking of Countries by the Competitive
Industrial Performance (CIP) Index, 2000,
2005 and 2009 6
Table 2.2. Ranking of the Economies on the Ease of Doing
Business 7
1. INTRODUCTION
At a time when many developing countries are rapidly
expanding their exports, Pakistan continues to struggle to accelerate the
exports of manufactured goods. It is generally believed that Pakistan’s
exports are not competitive in the international markets and thus the
country is unable to expand its market share. In particular, the firms
often complain the lack of a conducive investment climate that impedes
business expansion and exports. Against this backdrop, the objective of
this study is to carry out a systematic investigation of the firms’
perceptions on barriers to exports in various productive sectors of the
economy as well as to suggest possible remedies. This analysis is based
on a real time survey of exporters based in Lahore, complemented by a
study of determinants of export performance at the macro level (see
Appendix I).
The conceptual framework of the study is built around the notion
of competitiveness that has been defined as “the set of institutions,
policies, and factors that determine the level of productivity of a
country” (The Global Competitiveness Report 2009–2010). Thus
defined, competitiveness becomes a function of domestic institutional
and policy environment as well as circumstances prevailing in the
global market. On both of these fronts the environment for exporters
has drastically changed during the last three decades. In almost all over
the world the reforms undertaken during the 1980s and later years have
curtailed government interventions in markets and have reduced many
forms of trade barriers. This has created a general atmosphere
favourable to business activities, competitiveness and growth.
Substantial amount of empirical work has been undertaken to
identify factors existing in domestic and foreign markets which
promote or hinder export activities at micro and macro level; see for
example, Belloca and Maiob (2011), Aaby and Slater (1989), Madsen
(1987), and Zou and Stan (1998). For Pakistan, export performance has
been analysed at macro as well as micro level. Akbar and. Naqvi
(2001) analyse determinants of export performance at the country level,
whereas Masakure, Henson and Cranfield (2009), and Din, et al. (2009)
take up these issues at the firm level.
In addition to the studies cited above, there exists a body of
empirical literature that emphasises introspection process regarding
2
internal and external problems as an active element in assessing
hindrances faced by exporters. In such studies perceptions of firms are
directly taken as an important ingredient in the models. Admittedly,
perceptions may deeply be influenced by firms own capabilities and
internal circumstances. However, since entrepreneurs are rational, it
can be safely assumed that there exists a positive correlation between
actual problem and that perceived by the firm, and that any evidence
contrary to this might be an exception rather than rule. Viewed this
way, firms’ perceptions may greatly facilitate our understanding of the
actual problems faced by firms.
Some researchers analyse the difference between the perceptions
of exporting and non-exporting firms as a tool to empirically
investigate the barriers to export. Yaprak (1985) find existence of a
difference of perceptions about export barrier between exporters and
non-exporters for small exporting and non-exporting US firms. On the
other hand Ahmed, et al. (2005) find no significant differences in the
perceptions of Malaysian exporters and non-exporters towards different
barriers to export. Other studies focus on managerial perceptions of
only exporting firms regarding export barriers. For example, Axinn,
(1988) analyses how managerial perceptions influence export
performance of machine tool manufacturers in the US and Canada. The
study specifically considers the exporters’ perceptions of the benefits of
exporting rather than selling in the domestic market. It is found that
perceptions of the complexities related with exporting and managers'
work experience in foreign countries are related to the percentage of
exports relative to total sales of the firm.
Khorana, et al. (2010) focus on the perceptions of export
problems faced by Indian small and medium firms. The study evaluates
Indian exporters’ perceptions to problems they face in the EU market.
Sectors covered in the study are leather, footwear, and textile and
clothing. Export problems are put in two broad categories viz. external-
foreign and internal-foreign. External-foreign problems include
customs valuation and clearances, administrative and documentary
formalities, foreign regulations and standards etc. Internal-foreign
export problems mainly originate from firms’ organisational structure.
The results show that problems of exporting firms are largely of
external-foreign nature.
Siringoringo, et al. (2009) undertake a study to identify and
analyse the problems faced by Indonesian exporters in small and
medium enterprises. The study uses data about management perception
through a questionnaire designed to assess problems faced by SME
owner or manager. The list of problems include bureaucracy, product
3
quality, export procedures, lack of promotion and competition.
Respondents are asked to rank problems with 5 choices on Likert scale.
The findings suggest that export barriers are mainly due to lack of
human knowledge as well as government authorities and agencies. The
authors recommend equipping SME’s management with training and
information to overcome these problems.
The present study is in line with the empirical work described
above. The main objective is to evaluate exporters’ perceptions to the
problems faced in exploiting their full competitive potential in the
export markets. In addition, the study aims to suggest policies that
might be required to ensure that our exporters are able to take full
advantage of increased market access brought about by new trading
environment. We hope that recommendations that follow from the
analysis will be helpful in enhancing the export competitiveness of our
manufacturers.
The rest of the study is organised as follows. Section 2 sets out
the conceptual framework that helps identify the core issues, and spells
out the salient features of the questionnaire used in the survey. Section
3 discusses the main findings of the survey while Section 4 concludes
the discussion.
2. THE CONCEPTUAL FRAMEWORK
Export competitiveness is a complex issue. The factors that
affect export competitiveness vary over time, across sectors and
geographical locations. To keep the analysis at a manageable level, we
seek some common features which are in general helpful in improving
the business environment by reducing risks, costs and time, and thus
motivating entrepreneurs to invest more in terms of money and effort.
Major obstacles in creating a good business environment can be
categorised in the following headings:
Lack of trained labour
Financial inputs
Energy
Physical Infrastructure
Bureaucratic Hurdles
Institutional Rigidities
This is a very broad and general classification of obstacles faced
by manufacturers/exporters most of the time, and these obstacles do not
affect all sectors in a uniform manner. As pointed out in the previous
section, we adopt an indirect approach to assess how these factors
impact the performance of the businesses. We rely on the judgment of
4
the respondents regarding the intensity of the obstacle and ask the
respondents to rank the issues according to their perception about the
severity of the issue. We then use these rankings to provide a general
assessment about the sectoral incidence of these obstacles.
2.1. The Survey and Questionnaire
The study is based upon a survey jointly prepared by the Lahore
Chamber of Commerce & Industry (LCCI) and Pakistan Institute of
Development Economics (PIDE). Purposes sampling approach has
been used and the survey covers 40 firms/companies in the areas of
Textiles, Garments, Food Processing, Cement, Chemical, Hosiery/Bed
Sheets, Auto Industry, and Construction Materials. The questionnaire
has the following major components (see Appendix IV for the detailed
questionnaire):
2.1.1. Firm-Specific Characteristics
This part covers firm-specific characteristics like major activity,
location, and quantitative information on firm’s human resources. This
information can provide insights about how firm-specific
characteristics influence firm’s perception about different issues.
Moreover firms’ classification by size is possible by information about
the number of workers they employ.
2.1.2. Activities and Problems Currently Faced in Exporting
The World Bank’s World Trade Index (WTI) gives special
emphasis to procedural requirements for exporting of goods.
Preparation of such an index was not possible due to many
constraints. Instead, firms were asked to indicate their perception
about activities and problems currently faced in exporting. These
activities include pre-shipment activities, inland carriage and
handling, custom clearance custom release, and international
carriage and handling.
2.1.3. System of Certification
Many international standards have been developed to ensure
quality and a guarantee that goods are produced under healthy social
and environmental conditions. In the survey firms were asked to
provide information about their awareness of these standards. Firms
were also asked whether they are certified to these standards or if such
a system is currently being developed/planned or is being developed.
The following standards are covered in the survey:
5
ISO9000
ISO14000
HACCP
SA8000
OHSAS
EUREPGAP
Traceability
A brief description of these standards is provided in Appendix II.
2.1.4. WTO-related Agreements and Negotiations
Most of the WTO agreements came into force in early 1995.
However, there are wide differences in how different exporting
companies reacted toward these agreements. Some companies were
quick to respond and they promptly engaged themselves in active
negotiations, either directly or through some umbrella organisation, to
draw full benefits from these WTO arrangements. On the other hand
many companies lagged behind regarding these activities and
consequently met serious obstacles in meeting criteria set in these
agreements.
In the questionnaire firms are asked to state their position about
the following agreements:
The Agreement on Technical Barrier to Trade
The Agreement on Sanitary and Phyto-Sanitary Measures
The Agreement on Pre-Shipment Inspection
The Agreement on Intellectual Property Rights
A brief description of these agreements is given in Appendix III.
2.1.5. Shipping and Logistics
Shipping and Logistic include a wide range of activities such as
the performance of customs, physical infrastructure, inland transport,
and efficiency in cargo handling. Smooth functioning in these areas is
helpful in providing goods and services on time and at a lower cost.
Firms’ perception regarding these issues can point out important
bottlenecks. The survey also seeks firms’ perception on a set of
possible solution for improving the trade logistic environment.
2.1.6. Major Socio-Political Hindrances
These hindrances pertain to general imperfections which
adversely affect the working environment. The following obstacles are
identified in the survey and firms’ perceptions are sought about them:
6
Corruption
Injustice
Bribery
Political Interference
Terrorism
Lack of Infrastructure
Market Imperfections
Most of the responses about various issues and obstacles are
sought on Likert Scale varying from 1 to 6 levels, depending upon the
nature of the problem. This enables us to locate clustering of responses
at specific ranking as shown in the graphical analysis in the following
Section.
Table 2.1
Ranking of Countries by the Competitive Industrial Performance
(CIP) Index, 2000, 2005 and 2009
Rank
Country 2000 2005 2009
Pakistan 66 67 63
Singapore 1 3 1
China 31 6 5
India 51 42 42
Bangladesh 76 75 69
Iran 98 82 83
Nepal 97 91 94
Indonesia 38 40 43
Malaysia 13 20 27
Thailand 26 27 25
Source: “Industrial Development Report 2011”: UNIDO (2005, 2011).
Various measures taken to create a business friendly
environment have also had their impact. Within SAARC region
Pakistan ranks higher than India, Bangladesh Nepal and Bhutan in Ease
of Doing Business (Table 2.2).
7
Table 2.2
Ranking of the Economies on the Ease of Doing Business
Country 2007 2011
Singapore 1 1
Maldives 53 79
Pakistan 74 105
Bangladesh 88 122
Sri Lanka 89 89
Nepal 100 107
India 134 132
Bhutan 138 142
Afghanistan 162 160
Source: The World Bank, “Doing Business in South Asia 2007, 2011”.
3. KEY FINDINGS OF THE SURVEY
On the basis of number of workers, 38% of the establishments
are large scale enterprises with 300 or more workers. Twenty-four
percent of the establishments are medium with 101 to 300 workers. The
percentage of small establishments with up to 100 workers is 38
percent.
Seventy-five percent of the surveyed firms are involved in
manufacturing activity, while 20 percent are in trading. Only two
percent are multinational companies, and two percent are involved in
other activities.
By sectoral classification, textile firms have the highest
percentage (21%), followed by food industries (15%). Garment firms
are 13% and cement firms 10%. Firms engaged in activities of
Chemicals, Hosiery & bed sheet, General importers, Auto, and
Construction material, each comprise five percent, while fifteen percent
firms are engaged in other activities.
Small
(1-100)
38%
Medium
(101-300)
24%
Large
(301_hi) 38%
Manufa
cturing
75%
Trading
21%
Multinati
onal
Compan
y 2%
Other
2%
8
By the level of skills, general importers and cement firms have
the highest percentage of skilled labour, whereas chemicals and textile
firms have the least percentage of skilled labours.
Reasons for Shortage of Skilled Labour
Lack of institutional training is the most frequent reason reported
by firms for the shortage of skilled labour (35%), followed by low
quality of education (30%).
Textile
Garments
Food Processing
Cement
Chemicals
Hosiery/Bed Sheet
General Importers
Auto Industory
Construction Material
Others
0.0
20.0
40.0
60.0
80.0
100.0
120.0
Tex
tile
Garm
ents
Food p
rocessin
g
Cem
ent
Chem
ical
Housary
/bed sh
eet
Gen
eral im
porto
r
Auto
industo
ry
Constru
ctio
n m
aterial
Oth
er
Tota
l
Profile of Establishment:
Percentage Firms by Location
Unskilled
skilled
9
Reduction in Cost if Labour Becomes Productive
If the highest achievable level of labour productivity is achieved,
it will obviously reduce costs of the firms. But firms have different
perceptions about the extent of this cost reduction. The highest
percentage (35.48%) of firms believe that costs will be reduced by 01-
10%, whereas 29.08% believe 11-20% reduction. On the other hand
12.9% firms believe that there will be no such effect on cost.
Duration of Finance
It turns out that majority of firms (60%) use short term finance.
This indicates that most firms use finance for working capital needs.
Firms using medium term and long term finance are 4% and 36%
respectively.
010
2030
40
low quality of education
lack of on job training
lack of training staff
lack of institutional training
low salary
Perception of Firms
0
5
10
15
20
25
30
35
40
No of Firms
Percen
tag
e o
f F
irm
s
01-10
11-20
21-30
31-40
No Effect
10
Importance of Location
The location of a firm has an important bearing on its capacity to
produce and export. Cheap availability of inputs, good infrastructure,
high demand of output, and availability of skilled labour are important
factors while deciding about the location of the establishment. The
Survey figures show that high demand of output (34%), and availability
of skilled labour (27%) are the most frequent reasons while deciding
the location of the establishment. Cheap Availability of Inputs (21%)
when added to availability of skilled labour indicates that inputs play
more important role in deciding firms’ location.
Fuel (Electricity and Gas) as a Percentage of Total Cost
Fuel as a percentage of total cost turns out to be the highest in
cement producing firms (35%), whereas in garments and auto firms
these percentages are 2.17 and 2.60 respectively.
Short Term
Medium Term
Long Term
0 10 20 30 40
Cheap Availability of Inputs
Good infrastructure
High demand of output
Availability of skilled labour
Other
Profile of Establishments:
Percentage Firms by Location
Percentage of Firms
11
Problems Related with Electric Supply
Frequent load-shedding and power failures seriously affect the
working of industries in our country. Some industries have tried to
meet with this problem by using their own electricity generators and
UPS. The survey shows that about 23% industries use UPS and about
38% use generators to meet these problems related with electricity.
Activities and Problems Currently Faced in Exporting
Pre-Shipment Activities
The percentage distribution of the level of satisfaction about
procedures and sub-activities shows that level of satisfaction is least
(100% not satisfied) for the procedure labelled “Prepare freight
Forwarding Instructions and Other Documents Required for the
Transfer of Cargo to Port of Departure”. The percentage of firms
showing satisfaction about “Securing Letter of Credit” is 62.5.
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
Tex
tile
Garm
ents
Food P
rocessin
g
Cem
ent
Chem
icals
Hosie
ry/B
ed S
heet
Auto
Industo
ry
Constru
ctio
n M
aterial
Oth
ers
Fuel (Electricity and Gas) as a
Percentage of Total Cost
0
5
10
15
20
25
30
35
40
45
Percentage of UPS Users Percentage of Generator Users
12
Inland Carriage and Handling
Highest percentages of firms who are satisfied about “Load
Cargo on Local Carriage” and “Arrange a Deposit for Terminal
Handling Charges” are 57.1 and 63.6 respectively. Highest percentage
of “not satisfied” firms (33.3%) occurs in case of “Deliver cargo to port
of departure”.
Customs Clearance
In customs clearance activities, percentage of “satisfied” firms is
highest for “Inspection for Technical Standard” (62.5%). Highest
percentage of “Not Satisfied” firms is 23.1% for “Physical Inspection
of Goods to Determine if It Complies with Technical or Sanitary or
Phyto-Sanitary Standards”
0.0 20.0 40.0 60.0 80.0 100.0 120.0
1. Source letter of credit(L/C)
2.packing of good
3. Prepared freight
4. prepare document for export
5 arrange international freight
6. perform preshipment insepection
7. Arranging payment for preshipment
Activities and Problems Currently Faced in
Exporting: Pre-Shipment Activities
Not Satisfied
Somewhat
Satisfied
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
Load Cargo on
Local Carriage Deliver Cargo to
Port of Departure Wait for Custom
Clearance Arrange a Deposit
for Terminal
Charge
Inland Carriage and Handling
Highly Satisfied
Satisfied
Somewhat
Satisfied
13
Customs Release
Two issues are important about custom release:
Discharge cargo from terminal to export
Arrange payment for terminal handling charges
Here the level of satisfaction is quite high as only 6.7% and
7.7% of the firms are not satisfied respectively about these two issues.
This indicates that the reforms introduced in the last few years to
streamline customs procedures are paying off.
International Carriage and Handling
Here firms are asked to give their perception about the degree of
satisfaction on the following issues:
Examine document to prove that regulatory procedures are
met
Load cargo at port of departure
Transport goods to final destination
Arrange a payment for international freight charges
Highest percentage of satisfied firms is reported in case of
“Transport goods to final destination” (58.3%). Percentage of “Not
satisfied” firms is highest in case of “Load cargo at departure port”
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
Request fo
rCcle
arance
Exam
inatio
n o
f Man
dato
ry D
ocu
men
ts
Physica
l Insp
ection
Insp
ectio
n w
ithT
technic
al Stan
dard
s
Customs Clearance Highly Satisfied
Satisfied
Somewhat Satisfied
Not Satisfied
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
Hig
hly
Satisfied
Satisfied
Som
ewhat S
atisfie
d
Not S
atisfied
Customs Release
Discharge cargo
from terminal
Arrange a payment
for terminal
charges
14
System of Certification
The Government has increased the support for various quality,
environmental, and social certifications when a manufacturing unit gets
four of the specified standards (Strategic Trade Policy Framework
2009-12, p. 45). But low awareness of these systems among exporters
makes these measures practically ineffective. Percentage of awareness
about these systems of certification is highest among the firms in cases
of ISO 9000 and ISO 14000. Although it is not as high as it should be.
Only 40.54% of the firms are completely aware about ISO 9000 and
25% about ISO 14000. Unawareness is highest among firms about
EUREPGAP (55%).
0.0
10.0
20.0
30.0
40.0
50.0
60.0
Examine
Document to
Prove
Load Cargo at
Departure Port Transport Goods
to Final
Destination
Arrange a
Payment for
International
Freight
International Carriage & Handling
Highly Satisfied
Satisfied
Somewhat Satisfied
Not Satisfied
0.00
10.00
20.00
30.00
40.00
50.00
60.00
Awareness about Systems of Certification
Completely Unaware
Unaware
Aware
Completely Aware
15
Certification to the Standards/Preparation for Certification
Another issue that has affected the exports involves WTO
arrangements. These are the standards and norms prescribed by the
WTO like quality certification, and adherence to health, labour, and
environment standards. These standards have posed a real challenge to
firms in developing countries like Pakistan. It might be interesting to
find some patterns in certification of firms. Survey results show that the
highest percentage of firms turns out to be certified to ISO 9000
(66.7%). EUREPGAP and Traceability are the least met standards of
certification (7.7% and 5.1% respectively)
Agreements and Negotiations
Questions about firms’ awareness regarding different trade
agreements and negotiations show that 57.58% of firms are aware
about Agreement on Technical Barriers to Trade. Awareness is the least
about Agreement on Sanitary and Phyto-sanitary.
0.0
20.0
40.0
60.0
80.0
ISO
9000
ISO
14000
HA
CC
P
SA
8000
OH
SA
S
EU
RE
PG
A
P
Trac
eability
Preparation for Certification
Company Certufied to the System
System Being Developed/Planned on Being
Developed
Completely Unaware
Unaware
Aware
Completely Aware
0.00
10.00
20.00
30.00
40.00
50.00
60.00
Completely Unaware
Unaware
Aware
Completely Aware
16
Effect of Agreements on Business
What do firms perceive about the effect of trade agreements and
negotiations on their business? To assess this, firms were asked to rank
their perception from “Don’t know” to Very positive”. The responses
show that majority of firms (57.6%) regard agreement on pre-shipment
inspection as very negative. About one third of the firms are not clear
about most of the agreements and negotiations. A very small
percentage (about 10%) has any positive perception about these
agreements.
Perception about On-going Dialogues
Firms were asked about dialogues/consultations between their
business, or sector representatives/umbrella organisation and ministries
in charge of negotiating the rule-based multilateral trading system at
the WTO level. The responses show that about 40 to 45 percent firms
perceive theses dialogues as average. In case of Arrangements on
Sanitary and Phyto-Sanitary 27.2% even do not know about such
dialogues.
0.020.0
40.060.0
Don't Know
Very Negative
Negative
Neither Negative nor Positive
Positive
Very Positive
Effect of Agreements on Business
Agreement on Intellectual property right
Agreement on Pre-shipment Inspection
Arrangements on Sanitary & phyto-
sanitary
0.010.0
20.030.0
40.050.0
Do not Know
No dialogue
Weak Dialogue
Average Dialogue
Strong Dialogue
Very Strong Dialogue
Perception about On-going Dialogues
Intellectual Property Rights
Pre-Shipment Inspection
Sanitary & phyto- sanitary
Agreement on TBT
17
Use of Transportation Mode for Shipment
Major mode of transport used is roads except for “General
Importers” whose use of railway is about 57.5%. Highest use of roads
occurs in Chemical industries (100%). Auto industry is the biggest user
of Airways (52.5%).
Perception about Efficiency of Institutions
Majority of the firms (about 54%) believes Banks and
Chamber of Commerce as efficient. Provincial Authorities and
TDAP are reported as Not Efficient by 37.5% and 28.6% of the
firms respectively.
0.0
20.0
40.0
60.0
80.0
100.0
120.0
Railway
Air
Road
0.0
10.0
20.0
30.0
40.0
50.0
60.0
Tax
DepartmentBank
TDAPChamber Of
Commerce Provincial
Authorities
Perception about Efficiency of Institutions
Highly Efficient
Efficient
Slightlty Efficient
Not Efficient
18
Effect of Hindrances on Firms’ Cost
Terrorism and Lack of Infrastructure are ranked as “highly
significant” by 27.3 and 25% of the firms. Corruption is ranked
“slightly significant” by 40% of the firms, whereas political
interference is ranked “not significant” by 42.4% of the firms.
Reasons for Failure of Business
Bad Planning and bad government policy are perceived as the
major factors responsible for business failure by 69.2% and 64.1% of
the firms respectively.
0.010.0
20.030.0
40.050.0
Corruption
Injustice
Bribery
Political Interference
Terrorism
Lack of Infrastructure
Market Imperfections Not Significant
Slightly Significant
Significant
Highly Significant
0
10
20
30
40
50
60
70
80
Bad
Plan
nin
g
Lack
of F
inan
ce
Po
or M
arket C
on
ditio
n
Un
fair Com
petitio
n
Bad
Luck
Lack
of A
dvice
Bad
Go
vern
men
t Policy
No
Rules an
d R
egulatio
ns
Reasons for Failure of Business
19
Quality of Trade Logistics
About 40% to 58% of the firms regard quality of trade logistic as
support for business with respect to saving cost, reducing inventory,
improving efficiency, and consumer satisfaction.
Major Constraints to Improving Trade Logistic Environment
Opinions were sought on the following constraints to improving
trade logistic environment.
Many Agencies Involved
Many Documents Required
Slow Processing of Custom Clearance
Poor in Land, Road, or Rail Infrastructure
Poor Transportation Service
“Poor in Land, Road, or Rail Infrastructure” was reported by
38.2 percent of the firms as the “Major Obstacle” to improving the
trade logistic environment.
0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0
Saving Cost
Reducing Inventory
Improving Efficiency
Consumer Satisfaction
Quality of Trade Logistics
Not Effective
Slightly Effective
Effective
Highly Effective
0.0
10.0
20.0
30.0
40.0
50.0
Many A
gencies In
volv
ed
Many D
ocum
ents R
equired
Slo
w P
rocessin
g o
f Custo
m
Clea
rance
Poor In
Lan
d, R
oad
, or R
ail
Infrastru
cture
Poor T
ransp
orta
tion S
ervic
e
Major Constraints to Improving
Trade Logistic Environment
No Obstacle
Minor Obstacle
Moderate Obstacle
Major Obstacle
20
Perception about Policy Recommendations
The ranking of proposed solution shows that there is much
optimism about effectiveness of various policy options. Almost half of
the firms perceive these options as very important.
Reduction in Cost if Proposed Solutions are Implemented
If the above mentioned solutions are adopted then perceived
reduction in cost is given in the following chart. More than 40% firms
perceive 11-20 % reduction in cost due to these solutions.
Reduction in Cost if Proposed Solutions are Implemented
31.0
41.4
13.8
10.3
3.4
01-10
11-20
21-30
31-40
No Effect
Regional Distribution as Destination of Exports
The distribution of exports by region shows that more than 50%
of average exports go to South Asia. Whereas major destinations of
exports (with respect to the number of firms) are European Union and
East Asia with 27.1% and 25.4% of the firms respectively.
0.0
20.0
40.0
60.0
Epro
cessin
g o
f Docu
ments
Coord
inatio
n b
/w C
once
rned
Auth
oritie
s
One W
indow
Operatio
n
Elim
inate C
orru
ptio
n
Port In
frastrucu
re
Inlan
d T
ransp
ortatio
n
Easy
Mode P
ayin
g
Perception about Policy Recommendations
No Effect
Minor importance
Moderately important
Very Important
21
Regional distribution as Destination of Exports
Percentage of Firms
Percentage of Exports0.0
10.0
20.0
30.0
40.0
50.0
60.0
European
UnionEast Asia
North
AmericaSouth
AsiaMiddle
EastOthers
4. SUMMARY AND CONCLUSIONS
This study has attempted to analyse firms’ perceptions about
various obstacles which hinder export performance. Using the survey
data the study finds that on various issues firms’ responses cluster
around specific responses. This indicates the importance of those
specific issues and underlines immediate attention from government as
well industrial groups to address those issues. The shortage of skilled
labour turns out to be more severe in Textiles, Chemicals and Hosiery/
Bed Sheet sectors. Firms regard lack of institutional training, and low
quality of education as the most important reasons for the lack of
labour skills. A majority of the firms believe that if skilled labour
becomes available they will be able to reduce their cost and thus
enhance their competitiveness. In terms of the location decision of
exporting firms, the availability of various inputs plays a more decisive
role than output market.
Majority of firms do not avail long-term credit. Whether this is
due to demand side or supply side problems, is an issue which requires
further research. This also indicates that firms primarily seek financing
for their working capital needs and if this is streamlined there is
potential to lower the firms’ transactions costs. Also cost of fuel puts a
heavy burden on firms and adversely affects their competitiveness.
Availability of cheap fuel especially electricity is essential to boost
exports.
Quality certification and adherence to health, labour, and
environment standards is still a problem for exporters. There is urgent
need to increase awareness about these standards, and to simplify
procedures to avail facilities provided in this regard. While Pakistan has
22
set up the necessary institutional arrangements for certification issues,
the implementation remains limited mainly because exporters are not
aware about the standards. Raising their level of awareness can result in
significant gains in certification and quality improvements.
A number of institutional rigidities, market imperfection,
weaknesses in physical infrastructure, and lack of general business
environment are features commonly perceived by firms as hurdles in
export competitiveness. It is therefore essential that such constraints are
removed so that a conducive business environment is created for
exporters of manufactured goods. It goes without saying that energy
shortages are a binding constraint on manufacturing exports and that
there is an urgent need to resolve the energy issues.
Appendices
APPENDIX-I
EXPORT PERFORMANCE AT THE MACRO LEVEL
MODEL AND DATA
In this section we develop an econometric model to analyse the
effects of various factors on exports performance. Export performance
at the macro level is affected both by the international and domestic
variables. To investigate the effects of international variables we
employ FDI and real exchange rate whereas GDP growth rate, indirect
taxes, communication facilities, savings, industrialisation, labour force
and official development assistance is incorporated to measure the
effects of domestic variables on exports performance. The specified
export performance function is as follow.
,,,,,( tttttt TAXESODASAVINGGDPGROWTHFDIfEXPORTS
),,,, ttttt TELEPHROADSLFMVADREER … … … (1)
The functional form in Equation (1) provides information about the
important factors that affect the exports performance. To analyse their
real quantified effects of factors, we present model in logarithmic form
in equation given below:
),log(8),log(7),log(6
),log(5),log(4),log(3
),log(2),log(1log( )
ttt
ttt
ttt
LFaMVADaREERa
TAXESaODAaSAVINGa
GDPGROWTHaFDIaEXPORTS
).log(10),log(9 tt TELEPHaROADSa … … (2)
where the t represent period of time. The EXPORTSt corresponds to
exports as a percentage of GDP.
23
The independent variables appearing on the right hand side of
the Equation 1 belong to the following broad categories:
International Factors
This category includes FDI and REER. FDIt is foreign direct
investment as a percentage of GDP, whereas REERt is real exchange
rate which measured as multiplying the nominal exchange rate by US
CPI and divided by domestic CPI.
Public Policy Factors
In this category we include ODAt which is official development
assistance as a percentage of GDP, and TAXESt which show indirect
taxes as a percentage of GDP.
Infrastructural Factors
ROADSt and TELEPHt are two important variables capturing the
effect of infrastructure on export performance. ROADSt is the
percentage of paved roads as percentage of total roads, and TELEPHt
represents the number of telephones per 1000 persons.
Human Resource Factors
Pakistan being a labour abundant country relies much on labour
intensive technologies. Our labour force constitutes the biggest factor
of production in producing goods and services export as well as
domestic consumption. We have taken LFt labour force as a percentage
of total population of age 15+.
Other Structural Factors
In this category we have included GDPGROWTHt as annual
percentage growth rate of GDP, SAVINGt as national savings as a
percentage of GDP, and MVADt as industry value added as a
percentage of GDP,.
Data on all variables are taken from World Development
Indicators 2011, and cover the period 1980 to 2010.
Growth of the GDP is an indicator of future potential and
sustainability of production level [see Bertil (1968)]. The higher level
of production causes the export expansion, because surplus of output
can be exhausted in international markets. So we expect positive impact
of GDP growth on exports expansion.
24
Economic literature has discussed the role of FDI in exports
development. Pfaffermayr (1996) FDI found a positive
relationship between FDI and export growth and explained that the
main reason of exports expansion is multinational corporations
oriented exports. Hoekman and Djankov (1997) suggested that
FDI have positive or weak effects on the exports performance in a
country. These studies also pointed out that the role of FDI in
developing country is controversial and depends on motive for
investment, if the objective behind FDI is to capture domestic
market (tariff-jumping type investment), it may not contribute to
export growth. Higher savings may result in higher volume of
goods made available for exports. So we expect positive impact of
this variable on exports.
The official development assistance is to facilitate growth and
increase infrastructure, which in turn will favourably affect investment
climate. We expect positive effect of this variable on export growth.
The conventional relationship between exchange rate and exports
performance is discussed in theory. The depreciation in exchange rate
makes exports cheaper in international markets resulting in increased
demand for exports, therefore we expect the positive impact of real
exchange rate on export growth.
In current time period the use of communication facilities
has become inevitable. Kumar (1998) justified that the use of
communication facilities has favourable effects for exploration
and access to the new markets in world. We employ the number of
telephones sets in use to measure the effects of communication
facilities and expect a positive impact of provision of such
facilities.
The impact of indirect taxes could be negative on production
which may in turn adversely affect the export performance. The labour
force is considered as one of the key factors that determine the
production level of firms. Pfaffermayr (1996) shows that the
availability of labour force positively impacts the exports level as
skilled labour force enhances competitiveness through better
productivity. Finally, the industrialisation process can provide the basis
for sustainable growth in an economy. In this context, the value added
of manufacturing sector is used to account for the industrialisation
process in the export regressions.
Results
We estimate the Equation (2) with OLS technique. The
estimated results are reported in tables below.
25
Appendix Table 1
OLS Estimates of Model
Variable Coefficient t-Statistic
C 22.58 4.11
LOG(GDPGROWTH) 0.04 1.22
LOG(FDI) –0.03 –0.62
LOG(LF) –3.25 –2.54
LOG(MVAD) 0.55 1.51
LOG(ODA) 0.10 2.10
LOG(REER) –0.23 –1.24
LOG(SAVING) 0.28 3.53
LOG(TAXES) –2.29 –1.44
LOG(ROADS) –0.15 –0.52
LOG(TELEPH) 0.28 2.82
R-squared 0.87
Adjusted R-squared 0.81
Durbin-Watson stat 1.86
Although the controversial view exists on relationship between
FDI and exports in empirical literature, however, our study finds
negative impact of FDI on the export growth in Pakistan. The role of
FDI in exports promotion in developing countries remains controversial
and depends crucially on the motive for such investment; if the motive
behind FDI is to capture domestic market it may not contribute to
export growth. The low foreign direct investment, lower level of
infrastructure and the rigidity in both the factor as well as commodity
markets reduce the role of FDI in exports expansions in Pakistan.
According to results, the GDP growth has a positive but
insignificant impact on export growth. This may imply that GDP
growth is based on products that are primarily sold in the domestic
markets. The results also reveal that real exchange rate negatively
affects exports in Pakistan. It is theoretically consistent as depreciation
in exchange rate makes exports less expensive and increase export
growth.
For the measurement of communication facilities we employed
the number of Telephones. The effects of expansions in number of
Telephones are positive and significant. Thus expanding the network of
such facilities is helpful in exploration of new international markets.
Further, these make easy to access the world markets.
The effect of labour force on exports growth is negative and
significant. The increase in unskilled labour causes negative effects on
production level that in turn reduce the exports growth in Pakistan. The
26
effect of official development assistance variable is also positive and
significant. It shows that the positive behaviour of government
regarding the export facilitations develops the positive expectations of
exporters that play a positive role in exports performance.
Indirect taxes are negatively associated with exports. The
proportion of indirect taxes varies for different goods. So it seems that
indirect tax is high for exportable goods that adversely affect exports
performance in Pakistan.
The findings also provide evidence that increase in savings
significantly contributes to exports. Higher savings imply lower interest
rates that in turn promote investment opportunities. The manufacturing
value added also positively explains export growth in Pakistan but the
impact is statistically insignificant. This may be due to the fact that
major exports are agriculture based and that Pakistan’s manufacturing’s
exports are inelastic in world market.
APPENDIX-II
A BRIEF DESCRIPTION OF COMMONLY USED
STANDARDS THE INTERNATIONAL ORGANISATION
FOR STANDARDISATION (ISO)
It is an international standard-setting body established in 1947. It
has 158 member countries in the world. It is a non-governmental with
headquarters in Geneva, Switzerland. ISO promulgates worldwide
industrial and commercial standards. The ISO 9000 and ISO 14000 are
among ISO's most well-known standards. The ISO 9000 family
addresses quality management, whereas the ISO 14000 family
addresses Environmental management.
EurepGAP
EurepGAP was created in the late 1990s by several European
supermarket chains and their major suppliers as a common standard for
farm management practice. GAP is an acronym for Good Agricultural
Practices. It was to bring conformity to different retailers' supplier
standards. It has now become the world's most widely implemented
farm certification standard. Most European customers now require
EurepGAP certification as a prerequisite for doing business in
agricultural products.
Hazard Analysis and Critical Control Point (HACCP)
HACCP was conceived in the 1960s when the US National
Aeronautics and Space Administration (NASA) felt the need to design
27
and manufacture foods for space flights. Later it became a systematic
preventive approach to food safety and pharmaceutical safety. HACCP
is now being used in the food industry to identify potential food safety
hazards. HACCP principles are now included in the ISO 22000.
Social Accountability Standard (SA8000)
It is a standard for decent working conditions. It has been
developed and overseen by Social Accountability International (SAI). It
covers the issues like child labour, forced labour, freedom of
association, discrimination, and health and safety of workers etc.
Occupational Health and Safety Standards (OHSAS)
OHSAS was formed in January 2000. It was developed for
organisations to meet their health and safety obligations in an efficient
manner. It is the most widely recognised standard on Occupational
Health and Safety management. The system enables organisations to
identify problems and take appropriate measures to reduce occupational
hazards.
Traceability
Traceability refers to the completeness of the information about
every step in a process through all stages of production, processing and
distribution. Traceability enables to verify the history, location, or
application of an item by means of documented information. There is a
host of benefits associated with traceability. For example, in the case of
automobiles it makes recalls possible; in the food items it helps to
ensure food safety; in manufacturing industries it contributes to identify
counterfeit goods. EPC global Software Certification Program provides
information regarding certified products and the vendors who develop
them; TRACES (Trade Control and Expert System) assists in the
management of the import and export of live animals and animal
products to and from the European Union.
APPENDIX-III
A BRIEF DESCRIPTION OF SOME WTO AGREEMENTS
AGREEMENT ON TECHNICAL BARRIERS
TO TRADE (TBT)
This Agreement tries to ensure that regulations, standards,
testing and certification procedures do not create unnecessary obstacles.
However, the agreement provides member countries with the right to
take measures which may be regarded necessary for protection of
28
human health and safety, or the environment. This agreement came into
force with the establishment of the WTO at the beginning of 1995.
Agreement on Sanitary and Phyto-Sanitary Measures
This agreement was negotiated during the Uruguay Round of the
General Agreement on Tariffs and Trade. The agreement commits
member countries to enforce certain measure to protect public health.
These measures are based upon internationally established guidelines
and risk assessment procedures. Like Agreement on Technical Barriers
to Trade, this agreement also came into force with the establishment of
the WTO at the beginning of 1995.
Agreement on Pre-Shipment Inspection
Pre-shipment inspections are customarily carried out at the place
of origin. Their objective is to ensure that the type, quality, price and
customs valuation of goods are as claimed. These inspections are
usually performed by authorised private organisations. The agreement
on Pre-Shipment Inspection ensures that the pre-shipment inspection
process does not create unnecessary delays or discriminatory treatment.
The agreement came into force on January 1, 1995.
Agreement on Intellectual Property Rights
The WTO’s Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS)attempts to bring these rights under common
international rules. Like other WTO agreements the Agreement on
Intellectual Property Rights took effect on 1 January 1995. However
the time frame for full implementation varied across countries.
Developed countries were given one year to implement the agreement.
Developing countries were initially given 11 years, but later this date
was extended up to 2013.
APPENDIX-IV
QUESTIONNAIRE
This questionnaire is divided into six sections. The first section
asks about the characteristics of the sample firms. Technical
efficiencies and cost information issues are included in the second and
third section of the survey. The fourth section assesses information
about trade logistics matters. Further, the queries about the hindrance to
market access are included in section five. Last section asks the
suggestion of firms for policy recommendations.
29
Firm/Company’s Characteristics
Q1. What is the nature of business of the firm/company?
□ Manufacturing □ Trading
□ Multinational Company □ Other; please specify: …………………
Q2. What is the location of the firm/company? Why this location is
important fromor the business point of view?
Location …………………………………
□ Cheap availability of inputs □ High demand for output
□ Good infrastructure □ Others
□ Availability of skilled labour
Q3. Please indicate the number of people currently employed (full
time and part time) by your firm.
Regular Employees Part time Employees
Q4. What is the current percentage (%) of domestic demand and
export share of the firm’s product in total output or production?
Domestic demand % Exports as % of total
output
Firm/Company’s Technical Efficiency
Q5. What is the current share of skilled (professionals) and unskilled
workers in total number of employees?
Q6. Provide details on the leading sources of machinery imports and
what type of machinery/ technology your firm/ Company
imported.
Source 1: Region ……… Type of Technology……………..
Source 2: Region ……… Type of Technology……………..
Source 3: Region ……… Type of Technology……………..
Cost Information
Q7. Provide information about the capital structure used. Also
mention percentage of each mode.
30
□ Self-Financed …………% value
□ Debt Financed …………% value
□ Equity Financed …………% value
Q8. What is the percentage (%) of total cost for Fuel, Gas, Water and
Electricity?
□ Cost of Fuel as % age of total cost …………….
□ Cost of Electricity as % age of total cost …………….
□ Cost of Gas as % age of total cost …………….
□ Cost of Water as % age of total cost …………….
Activities and Problems in Exporting
Q9. Please fill in the following table
Procedures and Sub-activities
Time/Days
Consumed
Costs
(please specify
currency unit)
Name of
Agency
Involved
Degree of
Satisfaction
(Rate from
1 to 4) as
given in key
Pre-shipment activities Avg. Max.
1. Conclude Sales contract
2. Secure letter of credit (L/C)
3. Packing of goods
4. Prepare freight forwarding instruction
and other documents required for the
transfer of cargo to port of departure
5. Prepare documents for export
6. Arrange international freight
7. Perform pre-shipment inspection,
8. Arrange payment for pre-shipment
inspection
Inland carriage and handling
1. Load cargo on local carriage
2. Deliver cargo to port of departure
3. Wait for customs clearance
4. Arrange a deposit for terminal handling
charges
Customs clearance
1. Request for clearance
2. Examination of mandatory documents
3. Physical inspection of goods
4. Physical inspection of goods to
determine if it complies with technical
or Sanitary or Phyto-Sanitary standards
5. Arrange payment for export taxes,
tariff, and duties
6. Arrange payment for technical control
charges
Customs release
1. Discharge cargo from terminal to export
2. Arrange a payment for terminal
handling charges
International carriage and handling
1. Examine documents to prove that
regulatory procedures are met
2. Load cargo at port of departure
3. Transport goods to final destination
4. Arrange a payment for international
freight charges
31
Key for Rating:
1 = Highly Satisfied 2= Satisfied,
3 = Somewhat Satisfied 4 = Not Satisfied
System of Certification
Q10. What is your awareness of the following standard? (Please
circle)
Fully
Unaware Unaware
Averagely
Aware Aware
Fully
Aware
ISO9000
ISO14000
HACCP
SA8000
OHSAS
EUREPGAP
Traceability
Q11. Please indicates if your company is already certified to the
following standards or if the system is currently being
developed/ planning on being developed. (Please tick).
Company Certified to
System
System being developed/
planning on being
developed
ISO9000
ISO14000
HACCP
SA8000
OHSAS
EUREPGAP
Traceability
Agreement and Negotiations
(a) Are you aware of the following WTO agreements? (Please tick) Fully
Unaware Unaware
Averagely
Aware Aware
Fully
Aware
Agreement on
Technical Barrier to
Trade (TBT)
Agreement on Sanitary
and Phyto-Sanitary
Agreement on Pre-
shipment inspection
(PSI)
Agreement on
intellectual property
rights
32
(b) How these agreements affect your business?
Don’t
Know
Very
Negative Negative
Neither
negative
nor
Positive
Positive Very
Positive
Agreement on
Technical Barrier to
Trade (TBT)
Agreement on
Sanitary and Phyto-
Sanitary
Agreement on pre-
shipment inspection
(PSI)
Agreement on
intellectual property
rights
(c) How much dialogue /consultation is there between your
enterprise, or your sector representatives/umbrella organisation
and the ministries in charge of negotiating the rule-based
multilateral trading system at the WTO level? Please tick
Don’t
Know
No
Dialogue
Weak
Dialogue
Average
Dialogue
Strong
Dialogue
Very
Strong
Dialogue
Agreement on
Technical
Barrier to Trade
(TBT)
Agreement on
Sanitary and
Phyto-Sanitary
Agreement on
pre-shipment
inspection (PSI)
Agreement on
intellectual
property rights
Shipping and Logistics
Inland Transport
Q13. What type of transportation mode your company is using for
inland transportation, also mentions time for shipment?
1. □ Railways
2. □ Airways
3. □ Roads
33
Option Selects Time
Own transportation services [ ] [ ] days
Public transportation [ ] [ ] days
Private transportation [ ] [ ] days
What is the ton/km cost? Rs. _________
What is the total cost in Pak rupee? Rs. _________
Is this mode of transportation easily available? □ Yes □ No
Is it reliable? □ Yes □ No
What is the total cost of loading and unloading? Rs. _________
Loading and Unloading
Loading facilities are provided by you or not? □ Yes □ No
Unloading facilities are provided by you or not? □ Yes □ No
Total Transportation Cost
Below give the information regarding cost on different processes of
inland transportation and time required in completion of these
processes
Cost (Rs) Total time (Days)
Documentation Rs. _________ [ ] Days
Traveling Rs. _________ [ ] Days
Loading Rs. _________ [ ] Days
Unloading Rs. _________ [ ] Days
Clearance Rs. _________ [ ] Days
Total cost and time required for the completion of whole process
Rs. _________ [ ] Days
Labour
Q14. Is labour with required skills available? □Yes □ No
In case of shortage of skilled labour, specify the reasons
□ Low quality education □ Lack of training staff
□ Lack of training institutions □ Low Salary
if any other, then please specify: ___________________________
Q15. If the optimum level of labour productivity is achieved, then
how much it will reduce firm’s cost?
□ 01---10 % □ 11---20 % □ 21---30 %
□31---40 % □ No Effect
34
Q16. What type of back up is used to maintain consistent electric
supply and total cost to maintain such equipment?
(Maintenance cost covers those cost which required without use of
these equipment.) Only mention in corresponding type which firm use.
Type of Backup Cost of
Maintenance
Cost of Usage (Rs )
per Month
UPS
Fuel Generator
If other mention
Q17. If there is no back up for energy, then for how many hours, your
workers do not work due to load shedding in a day?
_________Hours in a Day
Q18. Role of Institutions
Rank the efficiency of the following institutions
1 2 3 4
Tax Department □ □ □ □
Banks □ □ □ □
TDAP □ □ □ □
Chamber of Commerce □ □ □ □
Provincial Authorities □ □ □ □
Note: (1= highly efficient, 2= efficient, 3= slightly efficient,
4 = not efficient)
If the efficiency of institutions is improved, then how much it will
reduce firm’s cost
□ 01---10 % □ 11---20 % □21---30 %
□ 31---40 % □ No Effect
Q19. Major Hindrances
Rank the effects of following factors on your firm/company’s
cost.
1 2 3 4
Corruption □ □ □ □
Injustice □ □ □ □
Bribery □ □ □ □
Political Interference □ □ □ □
Terrorism □ □ □ □
Lack of infrastructure □ □ □ □
Market Imperfections □ □ □ □
35
Note: (1= highly significant, 2= significant, 3= slightly significant,
4=not significant)
Q20. Business Failure
What factors responsible for failure of a business?
□ Bad Planning □ Lack of Finance
□Poor Market Condition □ Unfair Competition
□Bad Luck □ Lack of Advice
□Bad Government Policy □ No Rules and Regulations
Q21. Trade Logistics
To what extent Logistics affects your business regarding
following factor?
1 2 3 4
Saving Cost □ □ □ □
Reducing Inventory □ □ □ □
Improving Efficiency □ □ □ □
Consumer Satisfaction □ □ □ □
Note: (1= highly effective, 2= effective, 3= slightly effective,
4 = not effective)
What are the major constraints to the trade logistics environment?
1 2 3 4
Too many agencies are involved □ □ □ □
Too many Documents required □ □ □ □
Slow Processing of Custom Clearance □ □ □ □
Poor inland road or rail infrastructure □ □ □ □
Poor Transportation Service □ □ □ □
Note: (1= No obstacle, 2= Minor obstacle, 3= Moderate obstacle,
4 = Major obstacle)
Q22. Cost of Borrowing
Provide information about the capital structure used. Also
mention percentage of each mode.
Self-Financed Firm ____________ % value
Debt Financed Firm ____________ % value
Equity Financed Firm ____________ % value
Duration of Finance
□Short Term □Medium Term □Long Term
36
Interest rate varies with time period □Yes □No
If yes what is the interest rate for different time period mention in %
Short Term [ ] % Medium Term [ ] %
Long Term [ ] %
Interest rate paid annually or monthly □annually □monthly
Policy Recommendations
Rank the solution which you think will be most effective for
improving Logistics environment
1 2 3 4
Electronics processing of documents □ □ □ □
Coordination between concerned authorities □ □ □ □
One window operation □ □ □ □
Port infrastructure □ □ □ □
Eliminate corruption □ □ □ □
Inland transportation □ □ □ □
Easy mode of paying customs and port fees □ □ □ □
Note: (1 = No effect, 2= minor importance, 3= moderately important,
4= Very important)
If these solution are implemented then how much it will reduce
firm’s cost
□01---10 % □11---20 % □21---30 %
□31---40 % □No Effect
To what extent the role of ministry of trade, export promotion
bureau and other trade institutions is helpful?
□not helpful □helpful □very helpful
If not helpful, then suggest please, how the role of these
institutions can be improved?
Q23. Future Endeavours
Please share with us, what are your future plans for development of
your business and also to increase exports of your company.
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
37
In this regard, what help do you expect or ask for, from the
Government side?
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
Please give your valuable suggestions to increase the volume of
Pakistani Exports to the world:
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
Notes:
1. This questionnaire is part of a survey and joint study, conducted by
Lahore Chamber of Commerce & Industry and Pakistan Institute
of Development Economics (PIDE), to identify barriers to exports
faced by export-oriented firms.
2. All the information and inputs provided in this questionnaire will
be strictly considered and treated as confidential and will not be
shared with others.
3. All questions asking for your comments and feedback are open-
ended. Additional sheets of paper can be used to elaborate your
point of view or answer.
4. Any other.
REFERENCES
Aaby, Nils-Erik and Stanley F. Slater (1989) Management Influences
on Export Performance: A Review of the Empirical Literature
1978–1988. International Marketing Review 6:4, 7–26.
Ahmed, U. Zafar, et al. (2005) Malaysian Exporters and Non-Exporters
Perceptions of the Various Barriers to Export, Paper presented in
10th Annual Conference of Asia-Pacific Decision Sciences Institute.
Downloaded from: http://iceb.nccu.edu.tw/proceedings/APDSI/2005/
AuthorIndex/author1.html on 02-05-2012
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