摘要：This study investigates the factors affecting the deficit balance of trade in Pakistan. The data used in this study were collected from the period of 1981 to 2010. Unit root test confirms the stationary of all variables at first difference. The multiple regression analysis technique is used to identify the significance of different factors. Results indicate that exchange rate is having negative relationship with trade deficit, while gross domestic production, remittances and foreign direct investment have positive relationship with trade deficit. The Granger-Causality test confirms the bidirectional relationship between trade deficit and exchange rate, trade deficit and foreign direct investment, and in between trade deficit and remittances. On the other hand finds unidirectional relationship from trade deficit to gross domestic production. It is recommended that the policy makers should critically evaluate and analyze the exchange rate, remittances, gross domestic production and foreign direct investment on continuous basis to reduce the trade deficit
