IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/85254.html

Do RTAs Increase Bilateral Trade in the MENA Region?

Author

Listed:
  • Roesmara Donna, Duddy
  • Widodo, Tri
  • Adiningsih, Sri

Abstract

Middle East and North Africa (MENA) is an area with some special character, i.e. not easy to realize the process of integration and the country with abundant natural resources have better trade performance. This study aims to analyze the effects of RTAs to the trade of countries in MENA regions. The Gravity Model used to test the effects of democracy on trade. Estimation is done with several models, i.e. FE, RE, MLE, and PPML. The effects of RTAs on trade in MENA regions are varies. AA (Agadir Agreement) affects without trade creation, but trade diversion (1.41 percent) in the block and creates exports and imports with countries outside the block. The AMU (Arab Maghreb Union) affects through trade creation (4.07 percent) in blocks and imports diversion from outside into blocks. COMESA (Common Market for Eastern and Southern Africa) affects through trade creation (7.09 percent) in the blocks and export and import diversion from outside into blocks. The GAFTA (Greater Arab Free Trade Region) affects through trade creation (2.57 percent) in the blocks and export and imports creation outside the block. While the GCC (Gulf Cooperation Council) affects through export and import creation (2.59 percent). From this results can be concluded that RTAs increase bilateral trade in MENA region through several ways and various effect.

Suggested Citation

  • Roesmara Donna, Duddy & Widodo, Tri & Adiningsih, Sri, 2018. "Do RTAs Increase Bilateral Trade in the MENA Region?," MPRA Paper 85254, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:85254
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/85254/1/MPRA_paper_85254.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    2. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September.
    3. Andrew K. Rose, 2007. "Do We Really Know That the WTO Increases Trade? Reply," American Economic Review, American Economic Association, vol. 97(5), pages 2019-2025, December.
    4. Aysu Insel & Mahmut Tekce, 2011. "Bilateral Trade Flows in the Gulf Cooperation Council Countries : What happend to the Middle East Integration after 2003?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 26, pages 244-275.
    5. Craig R. MacPhee & Wanasin Sattayanuwat, 2014. "Consequence of Regional Trade Agreements to Developing Countries," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 29, pages 64-94.
    6. Nicolas Péridy & Javad Abedini, 2008. "The Greater Arab Free Trade Area(GAFTA): an Estimation of Its Trade Effects," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 848-872.
    7. 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.
    8. E. M. Ekanayake & Amit Mukherjee, 2010. "Trade Blocks and the Gravity Model: A Study of Economic Integration among Asian Developing Countries," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 25, pages 627-643.
    9. Anderson, James E. & Vesselovsky, Mykyta & Yotov, Yoto V., 2016. "Gravity with scale effects," Journal of International Economics, Elsevier, vol. 100(C), pages 174-193.
    10. Andrew K. Rose & Eric van Wincoop, 2001. "National Money as a Barrier to International Trade: The Real Case for Currency Union," American Economic Review, American Economic Association, vol. 91(2), pages 386-390, May.
    11. Andrew K. Rose, 2004. "Do We Really Know That the WTO Increases Trade?," American Economic Review, American Economic Association, vol. 94(1), pages 98-114, March.
    12. 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)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Setyastuti, Rini & Adiningsih, Sri & Widodo, Tri, 2018. "The Role of Governance Quality in Increasing Intra-ASEAN Trade," MPRA Paper 85258, University Library of Munich, Germany.
    2. Cipollina, Maria & Salvatici, Luca, 2007. "EU and developing countries: an analysis of preferential margins on agricultural trade flows," Working Papers 7219, TRADEAG - Agricultural Trade Agreements.
    3. Peter Egger & Douglas Nelson, 2011. "How Bad Is Antidumping? Evidence from Panel Data," The Review of Economics and Statistics, MIT Press, vol. 93(4), pages 1374-1390, November.
    4. Klein, Michael W. & Shambaugh, Jay C., 2006. "Fixed exchange rates and trade," Journal of International Economics, Elsevier, vol. 70(2), pages 359-383, December.
    5. Fabien Candau & Geoffroy Guepie & Reine Kouakou, 2018. "In Gravity no Veritas: Dubious Trade Elasticiy and Weak Effects of Regional Trade Agreements in Africa," Working Papers hal-02625930, HAL.
    6. Shehu U.R. Aliyu & Sani Bawa, 2015. "Gravity model by panel data approach: empirical evidence from Nigeria," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 8(1), pages 42-57.
    7. Gunes Gokmen, 2012. "Economic Clash? The Role of Cultural Cleavages in Bilateral Trade Relations," EcoMod2012 4252, EcoMod.
    8. Denis Medvedev, 2010. "Preferential trade agreements and their role in world trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 146(2), pages 199-222, June.
    9. (ed.), 0. "Research Handbook on Economic Diplomacy," Books, Edward Elgar Publishing, number 16053.
    10. Roesmara Donna, Duddy & Widodo, Tri & Adiningsih, Sri, 2018. "Does Democracy Increase Bilateral Trade in MENA Region?," MPRA Paper 86369, University Library of Munich, Germany.
    11. Christian Elleby & Wusheng Yu & Qian Yu, 2018. "The Chinese Export Displacement Effect Revisited," IFRO Working Paper 2018/02, University of Copenhagen, Department of Food and Resource Economics.
    12. Xie, Fang & Horan, Richard D. & Wolf, Christopher A., 2009. "A gravity model approach to forecasting tuberculosis transmission in cattle," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49382, Agricultural and Applied Economics Association.
    13. Paola Cardamone, 2007. "A Survey of the Assessments of the Effectiveness of Preferential Trade Agreements using Gravity Models," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 60(4), pages 421-473.
    14. Yuan Li & John C. Beghin, 2017. "A meta-analysis of estimates of the impact of technical barriers to trade," World Scientific Book Chapters, in: John Christopher Beghin (ed.), Nontariff Measures and International Trade, chapter 4, pages 63-77, World Scientific Publishing Co. Pte. Ltd..
    15. Kareem, Fatima Olanike & Martinez-Zarzoso, Inmaculada & Brümmer, Bernhard, 2016. "Fitting the Gravity Model when Zero Trade Flows are Frequent: a Comparison of Estimation Techniques using Africa's Trade Data," GlobalFood Discussion Papers 230588, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    16. Raúl Serrano & Vicente Pinilla, 2014. "New directions of trade for the agri-food industry: a disaggregated approach for different income countries, 1963–2000," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 23(1), pages 1-22, December.
    17. Jacqueline Karlsson & Helena Melin & Kevin Cullinane, 2018. "The impact of potential Brexit scenarios on German car exports to the UK: an application of the gravity model," Journal of Shipping and Trade, Springer, vol. 3(1), pages 1-22, December.
    18. Shahriar Kabir & Ruhul Salim, 2016. "Can A Common Currency Induce Intra-Regional Trade? The Southeast Asian Perspective," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 28(3), pages 218-234, November.
    19. Alemayehu Geda & Atnafu Meskel, 2008. "China and India's Growth Surge: Is it a curse or blessing for Africa? The Case of Manufactured Exports," African Development Review, African Development Bank, vol. 20(2), pages 247-272.
    20. Novy, Dennis, "undated". "Is the Iceberg Melting Less Quickly? International Trade Costs after World War II," Economic Research Papers 269734, University of Warwick - Department of Economics.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:85254. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.