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Regional and international trade of Armenia: Perspectives and potentials

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  • Hayrapetyan Grigor

    ()

  • Hayrapetyan Viktoriya

    ()

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    Abstract

    Unfavorable geopolitical situation and small scale of economy, trade balance deficit and raw-materials export enforce Armenia to look for new geographical and product perspectives in its foreign trade. Our paper aims to estimate trade potential for Armenia by product groups in regional and international directions using gravity approach. Applied gravity model estimates trade flows, which are disaggregated into 7 groups according to BEC’s 1-digit classification, between 139 countries during 2003-2007. Our key findings imply that trade relations of Armenia with most of main trade partners have no potential to develop. Armenia has exceeded its export potential almost with all the CIS countries. Trade relations with the EU countries should be re-considered on both product and geographical directions. Re-opening of Armenian-Turkish border could provide significant economic benefit for Armenian exporters. The most perspective product groups of Armenian export seem to be “Industrial supplies”, “Food and beverages”, and “Consumer goods”.

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    Bibliographic Info

    Paper provided by EERC Research Network, Russia and CIS in its series EERC Working Paper Series with number 11/14e.

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    Date of creation: 06 Nov 2011
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    Handle: RePEc:eer:wpalle:11/14e

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