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

Haider Mahmood (), Tarek Tawfik Yousef Alkhateeb and Nabil Maalel

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Agriculture Balance of Trade; Common Market for Eastern and Southern Africa; Gross Domestic Product; Panel Cointegration (search for similar items in EconPapers)
JEL-codes: F1 F14 (search for similar items in EconPapers)
Date: 2017-08-05
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Published in International Journal of Economics and Financial Issues 6.6(2017): pp. 177-182

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