Destination And Direction of Pakistan's Textile Exports: An Application of Hidden Markov Chain Approach

Abstract

The research uses the Hidden Markov Chain Approach to determine Pakistan's textile exports' direction, destination, and prospect. The study is based on the period between 2013-2022. The compound annual growth rate (CAGR) and Instability Index extract the direction and destination of Pakistan's textile exports. At the same time, we use the Hidden Markov Chain Approach for the prospects of Pakistan's exports because it shows the potential of the exports concerning the rest of the world. The study results showed that pullover jerseys, cotton towels, and dyed fabric have favorable growth rates and have great potential to increase future export volume. The results also revealed that pullover jerseys, boys' trousers, and cotton towels have much more potential to find new export markets. Based on the results of the present study it is recommended that policy makers should find out the reasond of negative CAGR of cotton yarn, Boy's Trousers, Women's Trousers, and Bedlinen as some of the products have the scope to meet international demand.