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Trade determinants and potential of Syria: using a gravity model ‘with an estimation of the Syrian crisis’ impact on exports’

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  • Zaki Mehchy
  • Rabie Nasser
  • Marc Schiffbauer

Abstract

This paper diagnoses export determinants for Syria between 1995 and 2010 using a gravity model applying Heckman's two-step approach with Least Squares Dummy Variables. The model analyzes total and manufacturing exports separately. In addition to the standard explanatory variables, the gravity model is augmented with the nominal effective exchange rate and institutional performance variables. The results show the importance of a relative improvement in Syrian institutions to increase exports. Furthermore, the paper estimates an index that identifies countries with a high potential demand for Syrian products. Finally, the gravity model is used to simulate the impact of the ongoing conflict in Syria on the potential for exports; the results show that sanctions and the deterioration in institutional factors are expected to have reduced Syria's export potential by more than 70%, which might lead to a complete collapse of the economy in the short term.

Suggested Citation

  • Zaki Mehchy & Rabie Nasser & Marc Schiffbauer, 2015. "Trade determinants and potential of Syria: using a gravity model ‘with an estimation of the Syrian crisis’ impact on exports’," Middle East Development Journal, Taylor & Francis Journals, vol. 7(2), pages 226-251, July.
    • Handle: RePEc:taf:rmdjxx:v:7:y:2015:i:2:p:226-251
    DOI: 10.1080/17938120.2015.1072699
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    Citations

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    Cited by:

    1. Mustafa Kahveci, 2019. "From Spring to Winter? An Analysis of "Arab Spring" Impacts on Turkey and Mena Region Foreign Trade with Gravity Approach," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(12), pages 1320-1334, December.
    2. Liudmila Popova & Ehsan Rasoulinezhad, 2016. "Have Sanctions Modified Iran’s Trade Policy? An Evidence of Asianization and De-Europeanization through the Gravity Model," Economies, MDPI, vol. 4(4), pages 1-15, October.
    3. Forat Suliman & Homam Khwanda, 2020. "External Sector: Between Congestion and Sanctions—‘Syrian Economy Case, 1987–2018’," Foreign Trade Review, , vol. 55(3), pages 382-401, August.
    4. Fachry Husein Rosyadi & Jangkung Handoyo Mulyo & Hani Perwitasari & Dwidjono Hadi Darwanto, 2021. "Export intensity and competitiveness of Indonesia's crude palm oil to main destination countries," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 67(5), pages 189-199.
    5. Gleb Aksenov & Ronglin Li & Qamar Abbas & Houlda Fambo & Sergey Popkov & Vadim Ponkratov & Mikhail Kosov & Izabella Elyakova & Marina Vasiljeva, 2023. "Development of Trade and Financial-Economical Relationships between China and Russia: A Study Based on the Trade Gravity Model," Sustainability, MDPI, vol. 15(7), pages 1-39, March.
    6. Safwan A. Mohammed & Ali Alkerdi & János Nagy & Endre Harsányi, 2020. "Syrian crisis repercussions on the agricultural sector: Case study of wheat, cotton and olives," Regional Science Policy & Practice, Wiley Blackwell, vol. 12(3), pages 519-537, June.

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