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Does More Trade Potential Remain in Arab States of the Gulf ?

Author

Listed:
  • A Salim, Ruhu

    (Curtin University)

  • Mahfuz Kabir, Mohammad

    (Bangladesh Institute of International Strategic studies)

Abstract

This paper examines whether the Gulf Cooperation Council Countries (GCC) exerted any trade enhancing impact on its members by employing standard augmented gravity model as well as stochastic frontier gravity model. Panel data sets are constructed over the period of 1980 to 2008 for imports and exports of the bloc’s main trading partners along with GCC countries. The major finding is that the trade enhancing effect of the bloc is significant. However, there is still huge unutilized trade potential between the member countries. Several diagnostic tests were run to check and rectify possible problems of heteroskedasticity and autocorrelation as well as cross-sectional dependence.

Suggested Citation

  • A Salim, Ruhu & Mahfuz Kabir, Mohammad, 2011. "Does More Trade Potential Remain in Arab States of the Gulf ?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 26, pages 217-243.
    • Handle: RePEc:ris:integr:0536
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    Cited by:

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    2. Memduh Alper Demir & Mustafa Bilik & Utku Utkulu, 2017. "The Impact of Competitiveness on Trade Efficiency: The Asian Experience by Using the Stochastic Frontier Gravity Model," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 5(4), pages 1-15.
    3. 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.
    4. Anderton Charles H. & Anderton Roxane A., 2021. "The Trade Disruption Hypothesis Fails for State-Sponsored Genocides and Mass Atrocities: Why It Matters," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 27(2), pages 143-168, May.
    5. Prema‐chandra Athukorala, 2009. "The Rise of China and East Asian Export Performance: Is the Crowding‐Out Fear Warranted?," The World Economy, Wiley Blackwell, vol. 32(2), pages 234-266, February.
    6. Cieślik, Ewa, 2017. "The New Silk Road: Seeking Opportunities for Polish Exports in the Chinese Market," Problems of World Agriculture / Problemy Rolnictwa Światowego, Warsaw University of Life Sciences, vol. 17(32, Part ), December.
    7. 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.
    8. Nayef Al-Shammari & Shaha Al-Obaid, 2018. "Linkages of Global Financial Crisis and Trade Direction in an Oil Based Economy," International Journal of Economics and Financial Issues, Econjournals, vol. 8(3), pages 250-259.

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    More about this item

    Keywords

    Gravity Model; Trade Effect Contemporaneous Correlation; Trade Potential; GCC;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration

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