Econometric analysis of the bilateral trade flows in the Gulf Cooperation Council countries
AbstractThis study analyzes the trade flows of the Gulf Cooperation Council (GCC) both among its member countries and with the rest of the world for the 1997-2002 and 2003-2007 periods. In this paper, the research question is whether the trade flows of the GCC countries with their partners have sustained and/or they have developed new relations over time, mainly after the 2003 Customs Union agreement of the GCC. For this purpose, fixed effects models have been estimated in order to obtain individual country effects variable. Then, trade model as a function of distance and income variables and the country effects model as a function of the time invariant control variables have been estimated simultaneously within the panel analysis using the Least Squares and Generalised Method of Moments under the assumption of the presence of cross section heteroskedasticity and the robust standard errors. It has been found that: (1) The order of top fifteen trade partners has changed significantly from the EU countries and the US to the Asian countries after 2003. (2) Exports and imports of the GCC countries are related to the wealth of the partner countries, but not to their distance, mainly due to the nature of their exported and imported goods, the characteristic of the region and developments in transportation facilities.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 22130.
Date of creation: 15 Apr 2010
Date of revision:
Gulf Cooperation Council Countries; Trade Flows; Gravity model; Panel Analysis; System Estimation;
Other versions of this item:
- INSEL, Aysu & TEKCE, Mahmut, 2010. "Econometric Analysis of the Bilateral Trade Flows in the Gulf Cooperation Council Countries," MPRA Paper 22184, University Library of Munich, Germany.
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-04-24 (All new papers)
- NEP-ARA-2010-04-24 (MENA - Middle East & North Africa)
- NEP-INT-2010-04-24 (International Trade)
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