Forecasting Trade Potential between Former Non-Trading Neighbors - The Israeli-Arab Case

Journal of World Trade, 38(2), pp. 267-284, 2004

33 Pages Posted: 26 Aug 2013

See all articles by Niron Hashai

Niron Hashai

Reichman University - Interdisciplinary Center (IDC) Herzliyah; Hebrew University of Jerusalem - Jerusalem School of Business Administration

Date Written: August 24, 2004

Abstract

A gravity model at the industry level is implemented to estimate the potential and industrial distribution of trade between former non-trading neighboring countries. The model incorporates a differentiated proxy for transportation costs at the industry level, rather than simply using geographic distance, and is implemented to estimate the trade potential between Israel and its Arab neighbors. Results show that a differentiated proxy for transportation costs is a better explanatory variable to the volume of trade than distance, and indicate a much larger trade potential between Israel and its Arab neighbors than estimates of previous studies.

Keywords: Trade potential, Distance sensitivity, Non-trading neighbors, Transportation cost

Suggested Citation

Hashai, Niron, Forecasting Trade Potential between Former Non-Trading Neighbors - The Israeli-Arab Case (August 24, 2004). Journal of World Trade, 38(2), pp. 267-284, 2004, Available at SSRN: https://ssrn.com/abstract=2315547

Niron Hashai (Contact Author)

Reichman University - Interdisciplinary Center (IDC) Herzliyah ( email )

P.O. Box 167
Herzliya, 4610101
Israel

Hebrew University of Jerusalem - Jerusalem School of Business Administration ( email )

Mount Scopus
Jerusalem, 91905
Israel

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