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الأبحاث وأوراق العمل

Jordan’s Trade Flow Amid Regional Political Tensions

 

Jordan has been affected negatively by many political tensions in the region during the last decade. This study aims to analyze the effects of policy tensions on the Jordanian trade by adopting an Augmented Gravity Model for the period (2001-2019), using Feasible Generalized Least Square (FGLS), and Seemingly Unrelated Regression (SUR) weights applied on panel data. The study found out that Gravity Model and Helpman theory can be applied on the Jordanian trade flows case, while Linder hypothesis was not applicable on the Jordanian case. The Main finding of the study reveals that there was a significant effect of policy tensions on the Jordanian exports and imports. It is estimated that the loss in exports and imports during 2010-2019 is about JD 5.0 billion (USD 7.0 billion) and JD 1.8 billion (USD 2.5 billion), respectively. Accordingly, the loss in net export as a result of regional political tensions was estimated to be around JD 3.2 billion (USD 4.5 billion). Moreover, during 2020, Jordan expected loss from the repercussions of coronavirus and the closure of boundaries was around to JD 632 million (USD 891 million) on exports, while decrease on imports was much higher around JD 1.6 billion (USD 2.3 billion). Accordingly, net export in 2020 was estimated to witness an improvement by around JD 1.0 billion (USD 1.4 billion).

 

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