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Does foreign policy determine foreign trade? Cointegration analysis of exports from selected countries to the Middle East

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  • Jarko Fidrmuc
  • Andreas Worgotter
  • Julia Worz

Abstract

The paper analyses the relations between foreign policy and export performance. The paper deals with exports of selected European countries and the USA to Middle Eastern countries including Israel. Cointegration analysis is used to identify common stochastic trends in export series. A long-term relationship implies no significant influence of foreign policy differences on trade performance. According to the Johansen tests applied to bivariate and multivariate models, German, Austrian, Dutch and EU exports to Israel are cointegrated with the US exports, while Swiss exports are never cointegrated with the exports of these countries. This result confirms the importance of foreign policy in trade performance.

Suggested Citation

  • Jarko Fidrmuc & Andreas Worgotter & Julia Worz, 2003. "Does foreign policy determine foreign trade? Cointegration analysis of exports from selected countries to the Middle East," Applied Economics, Taylor & Francis Journals, vol. 35(5), pages 565-571.
    • Handle: RePEc:taf:applec:v:35:y:2003:i:5:p:565-571
    DOI: 10.1080/0003684022000018196
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    References listed on IDEAS

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    Cited by:

    1. Sieds, 2012. "Complete Volume LXVI n.1 2012," RIEDS - Rivista Italiana di Economia, Demografia e Statistica - The Italian Journal of Economic, Demographic and Statistical Studies, SIEDS Societa' Italiana di Economia Demografia e Statistica, vol. 66(1), pages 1-296.

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