Munich Personal RePEc Archive

Egyptian Intra Agriculture Trade with Common Market for Eastern and Southern Africa Trading Partners: A Gravity Model

Mahmood, Haider and Alkhateeb, Tarek Tawfik Yousef and Maalel, Nabil (2017): Egyptian Intra Agriculture Trade with Common Market for Eastern and Southern Africa Trading Partners: A Gravity Model. Published in: International Journal of Economics and Financial Issues , Vol. 6, No. 6 (5 August 2017): pp. 177-182.

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Abstract

The regional trade provides better environment for any country to achieve the trade objective instead of a total free trade in this modern age. This study investigates the determinants of Egyptian agriculture trade with her 20 Common Market for Eastern and Southern Africa (COMESA) trading partners by using data of 1990-2015 and by applying pooled mean group estimators on gravity model. Our results are confirming the panel cointegration in our model. Egyptian gross domestic product (GDP) and population are negatively influencing to the agriculture balance of trade (BOT). COMESA trading partners’ GDP and population have positive impact on the BOT. The exchange rate depreciation has unfavorable impact on agriculture BOT in the short run and has a favorable impact in long run. This is an evidence for presence of J-curve hypothesis in Egyptian trade in COMESA region and also showing an elastic behavior of exchange rate on BOT in the long run. Hence, this study recommends to Egyptian policy makers to adopt depreciation policy to correct agriculture BOT with COMESA trading partners.

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