Does the Gravity Model Fit Jordan’s Trade Pattern?

Mohammad A. Alawin

Abstract


This paper aims at estimating Jordan's trade pattern using an augmented gravity model. This model will seek to analyze the relative importance of variables that drive trade flows in and out Jordan. Applying OLS to cross-section data for the period 2000-2005, the results show a consistency in Jordan's trade pattern over the period years, in addition to absence of any major change in the significance of variables that affect flows of trade.

Contrary to the findings of previous studies, the distance factor was insignificant in affecting the trade volume of Jordan. This may suggest that with the worldwide developments in the shipments sector that reduced both the cost and needed time of shipping, distance becomes no longer a barrier to trade. On the other hand, the common language factor is still maintaining the highest contribution to trade volume.


Keywords


Gravity Model, Jordan, International Trade.

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