STANDARD ESTIMATION FOR TRADE FLOW BETWEEN EGYPT AND EU WITH GRAVITY MODEL

Authors

Dept. Econ. and Rural Develop., Fac. Environ. Agric. Sci., Arish Univ., Egypt.

Abstract

Despite Egypt's signing of many trade agreements and joining many international economic blocs that are supposed to contribute to increase trade flow between Egypt and these countries, however, statistics indicate weak economic performance in the field of foreign trade in general and agricultural ones in particular. The total value of exports was estimated at $ 26.2 billion in 2017, while the total value of imports was estimated at $ 66.5 billion in 2017, which means that there is a deficit in the total trade balance estimated at
$ 40.2 billion, while the rate of export coverage of imports is estimated at 39.5%. The research aims at studying and analyzing the effects of trade agreements signed by Egypt with some international economic blocs on agricultural foreign trade through studying the current situation of the Egyptian trade balance, studying the current situation of the Egyptian agricultural balance, and the standard estimation of the flow of trade between Egypt and the European Union. The results of gravity model showed the results of the regression model (OLS) during the period (2013-2017) that the overall performance of the model looks good with a coefficient of determination of about 0.56, which means that the gravity model is efficient in explaining the bilateral trade flow of Egypt with the EU. The results of the model showed that the logarithm of the GDP of Egypt with each EU country is highly significant, with a coefficient of this variable estimated at 0.90.

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Sinai Journal of Applied Sciences
Volume 8, Issue 3
December 2019
Pages 291-298

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