Constraints on Trade in the MENA Region

19 Pages Posted: 22 Feb 2010

See all articles by Rina Bhattacharya

Rina Bhattacharya

International Monetary Fund (IMF)

Hirut Wolde

International Monetary Fund (IMF)

Date Written: February 2010

Abstract

In this paper we estimate gravity models to see whether trade volumes of countries in the MENA region are significantly lower than what would be expected given their economic, cultural and geographical characteristics. Our empirical results show that the variables used in standard gravity models cannot explain a significant part of MENA's trade performance, particularly on exports. We then go on to 'augment' the standard gravity model with relevant variables from the World Bank's Business Enterprise surveys. Our results further show that these variables, and in particular transport constraints and inefficiencies in customs clearance processes, are important in explaining the MENA region's underperformance in trade.

Suggested Citation

Bhattacharya, Rina and Wolde, Hirut, Constraints on Trade in the MENA Region (February 2010). IMF Working Paper No. 10/31, Available at SSRN: https://ssrn.com/abstract=1555483

Rina Bhattacharya

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Hirut Wolde (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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