Influence of Supply Chain Management & Logistics in the Wake of China Pakistan Economic Corridor (CPEC) on Domestic Industry in Pakistan

Abstract

China Pakistan Economic Corridor (CPEC) is one of the six corridors of China’s Belt and Road Initiative (BRI) and it consists of several infrastructural, logistics, energy, transportation and port related projects. This paper relies on survey data from 270 respondents working in different industries in Pakistan. Structural Equation Modeling (SEM) is applied to analyze the pertaining hypotheses. First, a measurement model is conducted by Confirmatory Factor Analysis (CFA) and then a structural model is estimated to test the hypotheses and model fit. The results show that despite the popular belief that Pakistan’s domestic industry will expand with progress in projects of CPEC, there is also a valid concern that the CPEC might present more opportunities to China than to Pakistan, especially in terms of employment opportunities. The government of Pakistan needs to consolidate this concern in future policy designs and also work on some external factors such as poor governance and corruption.