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A Gravity Approach to Determinants of Export in a Small Open Economy: ?Evidence from Jordan

Author

Listed:
  • Metri F. Mdanat

    (Department of Management Sciences, German Jordanian University, Jordan University, Jordan)

  • Taleb A. Warrad

    (Department of Business Economics, Jordan,)

  • Loay M. Salhieh

    (Department of Logistic Sciences, German Jordanian University, Jordan,)

  • Talah S. Arabiyat

    (Department of Management Sciences, German Jordanian University, Jordan.)

Abstract

This study seeks to identify the main factors affecting exports in small open economies. It uses panel data from 2001 to 2014 and a gravity model to identify these factors in one such economy. Our results are relevant for policymakers in small economies which engage in free trade agreements and trade liberalization to pursue economic development via trade openness and investment. We found mixed results as to the? ?direction of the relationship between free trade agreements and exports, a positive ?contribution of relative income in boosting exports and negative distortionary effects of distance ?and costs on exports.? These findings suggest that there are differential impacts of trade liberalization over time on the export performance of small open economies. Hence, policies aiming to maximize the benefits of trade agreements and reduce costs may be helpful in promoting exports.

Suggested Citation

  • Metri F. Mdanat & Taleb A. Warrad & Loay M. Salhieh & Talah S. Arabiyat, 2018. "A Gravity Approach to Determinants of Export in a Small Open Economy: ?Evidence from Jordan," International Journal of Economics and Financial Issues, Econjournals, vol. 8(2), pages 40-46.
  • Handle: RePEc:eco:journ1:2018-02-6
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    References listed on IDEAS

    as
    1. M. Ataman Aksoy & John C. Beghin, 2005. "Global Agricultural Trade and Developing Countries," World Bank Publications, The World Bank, number 7464, September.
    2. Dr. Walid Abdmoulah and Dr. Belkacem Laabas, "undated". "Assessment of Arab Export Competitiveness in International Markets using Trade Indicators," API-Working Paper Series 1010, Arab Planning Institute - Kuwait, Information Center.
    3. Andrés Artal-Tur & Ahmed Farouk Ghoneim & Nicolas Peridy, 2015. "Proximity, trade and ethnic networks of migrants: case study for France and Egypt," International Journal of Manpower, Emerald Group Publishing, vol. 36(4), pages 619-648, July.
    4. James E. Anderson & Douglas Marcouiller, 2002. "Insecurity And The Pattern Of Trade: An Empirical Investigation," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 342-352, May.
    5. Buch, Claudia M. & Kokta, Robert M. & Piazolo, Daniel, 2003. "Foreign direct investment in Europe: Is there redirection from the South to the East?," Journal of Comparative Economics, Elsevier, vol. 31(1), pages 94-109, March.
    6. Vivek B. Arora & Athanasios Vamvakidis, 2004. "How Much Do Trading Partners Matter for Economic Growth?," IMF Working Papers 04/26, International Monetary Fund.
    7. Tomasz Brodzicki & Stanislaw Uminski, 2013. "International trade relations of enterprises established in Poland's regions: gravity model panel estimation," Working Papers 1301, Instytut Rozwoju, Institute for Development.
    8. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-116, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Gravity model; Export determinants; Economic growth.;

    JEL classification:

    • F1 - International Economics - - Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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