2. Literature Review (b) Empirical Studies Ynikkaya (2003) Estimated The

2. Literature Review (B) Empirical Studies Ynikkaya (2003) estimated the effects of trade on the per capita of 120 countries by using two measures. The first measure was estimated by using trade volumes which include different ratios of trade variables (exports, imports, exports plus imports and trade with developed countries) with GDP. Another measure based on trade restrictiveness estimated by calculating restrictions on foreign exchange on bilateral payments and current transactions. He named this model as Generalize Method of Movement. The results of the GMM estimates showed that first group of openness, based on trade volumes were significant and positively related with per capita growth. However, for developing countries openness based on trade restrictions were also significant and positively related with per capita growth. He therefore concluded that trade restrictions in developing countries may cause faster GDP growth. Sinha D., Sinha T. (2000) analyzed the effects of growth of openness and investment on the growth of GDP for 15 Asian countries during 1950 to 1992. They developed a model which specified GDP growth a function of growth rates of openness (export plus import), domestic investment and population. The Auto Regressive Model (ARMA) results show that for China, Hong Kong, Iran, Iraq, Israel, Myanmar, Pakistan and Singapore, the coefficient of the growth of openness is positive and significant In 1980 Pakistan change its policy for increasing its trade to increase its GDP growth. The conversion of fixed into flexible exchange rate, duty free imports of essential machinery and raw material to certain export-industries, and the export rebates proved to be major factors of export growth during this period. In addition, other main export incentives provided by the government included: (i) compensatory rebates scheme; (ii) export credit guarantee scheme; and (iii) granting credit for exporters. Furthermore, during the second half of the 80s, for the promotion of textile industry the duty-free imports of machinery for Balancing, Modernization and Replacement (BMR) purpose were allowed. On the import front, the government took various steps for liberalizing imports As a result of these policies, the share of manufacturing and semi manufacturing exports in total exports rose sharply (that is, 58 percent in 1979-80 to 80 percent during 1989-90.