How did Wars Dampen Trade in the MENA Region?

Fida Karam () and Chahir Zaki

No 933, Working Papers from Economic Research Forum

Abstract: The paper investigates the effects of wars on trade in the Middle East and North Africa (MENA) region. As a region, MENA faces considerable risk of conflicts. Using an augmented gravity model, we introduce a war variable and distinguish between different types of conflicts. We run a battery of sensitivity analysis tests to control for the endogeneity problem that may arise in our estimation. The results show that, in general, wars have a significantly negative impact on exports, imports and trade. Civil conflicts hinder exports, imports and trade significantly. The disaggregated version of the gravity model shows that non-state conflicts have a detrimental effect on bilateral trade flows in manufacturing and that none of the conflicts do affect trade in services. Finally, the outcome of the gravity model for manufacturing sectors has been used to compute ad-valorem equivalents of wars at the country level. We found that, on average, a conflict is equivalent to a tariff of 5% of the value of trade. More heterogeneity is observed at the sectoral level (where AVEs range from 4% to 65%).

Pages: 35
Date: 2015-08, Revised 2015-08
New Economics Papers: this item is included in nep-ara and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published by The Economic Research Forum (ERF)

Downloads: (external link)
http://erf.org.eg/wp-content/uploads/2015/12/933.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://erf.org.eg/wp-content/uploads/2015/12/933.pdf [301 Moved Permanently]--> https://erf.org.eg/wp-content/uploads/2015/12/933.pdf)
http://bit.ly/2lIPJaw (text/html)

Related works:
Journal Article: How did wars dampen trade in the MENA region? (2016)
Working Paper: How did wars dampen trade in the MENA region? (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:erg:wpaper:933

Access Statistics for this paper

More papers in Working Papers from Economic Research Forum Contact information at EDIRC.
Bibliographic data for series maintained by Namees Nabeel ().