Trade Between Euro Zone and Arab Countries: a Panel Study
AbstractWe construct an aggregate data panel to estimate price and income elasticities of the Arab countries imports from and exports to euro zone. We study the non-stationarity of our series and verify the cointegration hypothesis among the variables using Pedroni's heterogeneous panel cointegration tests (2004). The panel data circumvent the problem of short span sample and increase the power of the non stationarity tests. Then, we estimate the idiosyncratic and panel cointegrating vectors using DOLS (Kao and Chiang, 2000), FMOLS (Phillips and Hansen, 1990) and group-mean DOLS and FMOLS developed by Pedroni (2000, 2001). Our variables are shown to be cointegrated. Arab imports from Euro zone countries are income inelastic, but price elastic. Results of export function are not conclusive and depend on the used estimator.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 13675.
Date of creation: Mar 2006
Date of revision:
Publication status: Published in Applied Economics 16.39(2007): pp. 2099-2107
Imports; Exports; Time series; Panel Cointegration; DOLS; FMOLS;
Other versions of this item:
- Nasri Harb, 2007. "Trade between Euro zone and Arab countries: a panel study," Applied Economics, Taylor & Francis Journals, vol. 39(16), pages 2099-2107.
- F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
- F30 - International Economics - - International Finance - - - General
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
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