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Import Determinants and Potential Markets: A Panel Data Gravity Modelling Analysis for Bahrain

Author

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  • Abbas Shujaat

    (Department of Economics, Institute of Business Management, Karachi, Pakistan)

  • Waheed Abdul

    (University of Bahrain, College of Business Administration, Department of Economics and Finance, Sakhir, Bahrain)

Abstract

This study investigates macroeconomic determinants of import flow and explores potential import markets for Bahrain using an augmented gravity model on panel data of 42 trading partners, from 2000 to 2016. The result of panel generalized least square estimation technique shows that the core variables support the theory of the basic gravity model. The estimated results of the augmented variables show that the imports of Bahrain are more responsive to income of trading partners, gross domestic product, and export flow; whereas, negatively determined by the relative price. The findings of dummy variables show that there is a significant role of common language and Gulf economic integration on imports of Bahrain. The results of the import potential analysis show that Bahrain has exceeded its import potential from most of its Asian trading partners; however, positive import potential exists in Africa and America and some selected Middle Eastern and European markets.

Suggested Citation

  • Abbas Shujaat & Waheed Abdul, 2018. "Import Determinants and Potential Markets: A Panel Data Gravity Modelling Analysis for Bahrain," Review of Middle East Economics and Finance, De Gruyter, vol. 14(1), pages 1-7, April.
    • Handle: RePEc:bpj:rmeecf:v:14:y:2018:i:1:p:7:n:1
    DOI: 10.1515/rmeef-2017-0017
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    References listed on IDEAS

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    1. Houcine Boughanmi, 2008. "The Trade Potential of the Arab Gulf Cooperation Countries (GCC): A Gravity Model Approach," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 42-56.
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    4. Bergstrand, Jeffrey H, 1989. "The Generalized Gravity Equation, Monopolistic Competition, and the Factor-Proportions Theory in International Trade," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 143-153, February.
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    Cited by:

    1. Shujaat Abbas, 2018. "Free Trade Agreements and International Trade Flow of Pakistan: the Gravity Modelling Approach," Journal Global Policy and Governance, Transition Academia Press, vol. 7(2), pages 71-84.
    2. Sri Indah Nikensari & NFD Puspitasari & Amin Pujiati, 2020. "Demand and Strategy of Imports in Declining Foreign Exchange Reserves," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 96-110.
    3. Wani Suadat Hussain & Mir M. Afzal, 2023. "Import Determinants and Potential Markets of Pakistan: An Application of PPML Gravity Model," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 33(1), pages 57-73, March.

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    Keywords

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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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