Javed Iqbal, Misbah Nosheen



Traditional HOS theorem postulates a re-distribution of
employment from import competing sector towards export oriented
sector with free trade. In order to test this theory for Paksitan, this
study investigates the impact of trade on employment and wages of
export oriented and import competing industries while using time
seres data over 1970-71 to 2005-06 and a cross section of 5 export
oriented and 13 import competing industries For estimation purpose,
we have used GMM approach. Empirial results show that trade
liberalization has a positive impact on employment and wage of both
export oriented and import competing industries. The results are
robust to different measures of liberalization.

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