Revisting the Trade-Growth Nexus: Further Evidence from Egypt

This paper utilizes Feder’s production function in revisiting the relationship between exports and economic growth by testing the hypothesis of the export-led growth in relation to the Arab Republic of Egypt. It also aims to show the difference in the marginal productivities between the export and non-export sectors in Egypt and how the export sector can positively affect the non-export sectors. The model mainly adopts a supply-side description of the economy, using the neo-classical growth approach under the framework of an aggregate production function. The conclusion of the study is that marginal productivities are higher in the export sector than in the non-export sector. This will allow the Egyptian economy to grow faster without having new capital infusion or labor expansion simply by reallocating the limited resources into the export sector. The reallocation of resources to the export sector will produce positive externalities and result in higher productivity for the whole Egyptian economy.

What is the trade response of the regional grouping in the GCC Countries?

This paper examines whether the GCC exerted any trade enhancing impact on its members by employing standard augmented gravity model as well as stochastic frontier gravity model. Panel data sets are constructed over the period of 1980 to 2008 for imports and exports of the bloc's main trading partners along with GCC countries. Several diagnostic tests were run to check and rectify possible problems of heteroskedasticity and autocorrelation as well as cross-sectional dependence. The empirical result shows that most of the variables have desired signs and turn out to be statistically significant. Importantly, the major finding is that the trade enhancing effect of the bloc is significant