THE EFFECT OF ECOLABELLING ON THE EXPORT PERFORMANCE OF TEXTILE FIRMS IN PAKISTAN

With greater competition and an increased demand for environmental compliance, Pakistan needs to focus on sustainable practices to boost its textile exports. Since textiles are one of the most important sectors in Pakistan's economy, the effect of ecolabelling on the export performance of textile firms was analysed in this study. For this purpose, export intensity was used as a proxy for export performance. The study utilized panel data on 136 textile firms listed on the Pakistan Stock Exchange (PSX) covering the period from 2009 to 2019. Empirical estimation was conducted by using the fixed effect model (FEM), random effect model (REM) and common effect model (CEM). The results of the study show that ecolabelling programmes have a significant positive effect on the export performance of textile firms. Finally, policy recommendations for industrialists and governments regarding the improvement of their export performance through the adoption of ecolabels for their products are presented.