Shahid Mahmood

Name: Shahid Mahmood

Proposed Supervisor: Dr. Abdul Rasheed

Topic: The impact of exchange rate changes on firms' exports in Pakistan: An empirical analysis using firm level data

Brief Summary:

Due to varies problems, a wide range of changes have been seen in Pak Rs. It has been going on depreciating since 2006. Text book theory shows its positive impact on exports at aggregate level and at firm level. Many studies have been carried out to examine it empirically, whether changes in exchange rate affect exports positively or negatively. Their results are different. Some show positive, some negative and some even show no its no effect. We will empirically analyze the impact of exchange rate changes on exports of the firms in Pakistan using micro level data from balance sheets of the firms, published by the State Bank of Pakistan, covering the period 2006-2012. We will use system-GMM method to estimate our results.

Comments of Dr. Asad Zaman:

Improve your model!

Date of proposal presentation:

4th June, 2013

Proposal and presentation are attached.

COMMENTS:

TITLE explains topic of research adequately

SLIDE 3: provides background, BUT is written incoherently so as to be not comprehensible: re write to make sense:

RELEVANT POINT: Breakdown of Bretton Woods led to FX instability, which impacts adversely on trade.

Second Bullet A LIST of issues with NO APPARENT relation to topic of research

THIRD BULLET seems related but connection needs to be made

FOURTH BULLET ??? what does it mean

SLIDE 4: GOOD, object clearly stated. GAP clearly stated -- but some literature should be cited to support this. HYPOTHESIS is also clearly stated, BUT do we not need to consider Marshall Lerner Condition here?

SLIDE 5: First two points just re-state what was said in previous sllide. SIGNIFICANCE is not correctly stated, -- what is said is just wrong.

SLIDE 6: First bullet investigate VOLATILITY of exchange rate as a factor. Previously you have been talking about EXCHANGE rate ITSELF as a factor, THESE two are very different things, annd you need to distinguish clearly between the two. SECOND point seems related to your topic, since it talks about levels AND is firm level research. FIRST point seems COMPLETELY irrelevant.

SLIDE 7: This literature seems relevant, should be explained more clearly, especially in its relation to YOUR RESEARCH (planned)

SLIDE 8: You have obviously copied the model, but you have not cited the source, which is plagiarism. Furthermore, at firm level, we need to look at exchange rate of trading partner. If a firm exports rice to Saudi Arabia, then fluctuation in Rupee Rial is relevant, while exporters to Germany will be affected by Rp Duetsche Mark fluctuations. You need to discuss more about firm level studies You mention size, but it is not explictly indicated in the model, it could be part of Z.

OVERALL -- It seems that you are taking an established model and estimating it on firm level in Pakistan. Innovation is FIRM level estimation which has not been done before in Pakistan. You need to state this clearly. THEN you need to explain what was learnt from this exercise when it was carried out elsewhere, WHY it matters for Pakistan, and what expected results might be. Substance is OK, but presentation is weak in certain respects.