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Factors Affecting Trade Balance, The Case Of Jordan

Author

Listed:
  • Dr. Mohammad Alawin

    (Associate Professor, Business Faculty, The University of Jordan, Amman, Jordan)

  • Eman Al-Maghareez

    (Researcher, Business Faculty, The University of Jordan, Amman, Jordan)

Abstract

This study attempts to investigate the long-run relationship between Jordanian trade balance and remittances, Real Gross Domestic Production (RGDP), Foreign Direct Investment (FDI), and Real Exchange Rate (RER) for the period (1980-2010). Unit root, Granger causality, and Co-integration tests are used to look into this relationship. The results indicate that all variables have significant impacts on the trade balance except RER. Part of this variable insignificance could be attributed to fixing the nominal exchange rate since 1995. This decision by the Central Bank of Jordan prevents RER, partially, from reflecting changes in the trade balance.

Suggested Citation

  • Dr. Mohammad Alawin & Eman Al-Maghareez, 2013. "Factors Affecting Trade Balance, The Case Of Jordan," Far East Journal of Psychology and Business, Far East Research Centre, vol. 11(3), pages 33-49, May.
    • Handle: RePEc:fej:articl:v:11b:y:2013:i:3:p:33-49
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    References listed on IDEAS

    as
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    4. Waliullah & Mehmood Khan Kakar & Rehmatullah Kakar & Wakeel Khan, 2010. "The Determinants of Pakistan’s Trade Balance: An ARDL Cointegration Approach," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 15(1), pages 1-26, Jan-Jun.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Trade Balance; Remittances; RGDP; Foreign Direct Investment; Real Exchange Rate;
    All these keywords.

    JEL classification:

    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration

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