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Trade volume and economic growth in the MENA region: Goods or services?

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  • Karam, Fida
  • Zaki, Chahir
Abstract
This paper explores the macroeconomic and sectoral effects of goods and service trade on the economic performance of MENA countries for the period 1960–2011. While the MENA region has been widely neglected in the trade and growth literature, this paper offers a decomposition of MENA GDP growth in order to disentangle the contributions of both service and goods trade. The results show a positive association between real GDP and both service and goods trade. The interaction term between trade in goods and trade in services is negative, suggesting that as goods trade increases, the marginal effect of service trade on real GDP decreases. However, the overall effect of service trade on real GDP is positive. The decomposition of GDP growth reveals a greater impact of goods trade, although service trade is important, and for most countries greater than the effect of tertiary enrolment.

Suggested Citation

  • Karam, Fida & Zaki, Chahir, 2015. "Trade volume and economic growth in the MENA region: Goods or services?," Economic Modelling, Elsevier, vol. 45(C), pages 22-37.
    • Handle: RePEc:eee:ecmode:v:45:y:2015:i:c:p:22-37
    DOI: 10.1016/j.econmod.2014.10.038
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    6. Merve Aksoylar Baysoy & Sumru Altug, 2019. "Growth Spillovers in the MENA Region," Koç University-TUSIAD Economic Research Forum Working Papers 1909, Koc University-TUSIAD Economic Research Forum.
    7. Klaus Schmidt-Hebbel, 2019. "Macroeconomic Institutions: Lessons from World Experience for MENA Countries," Working Papers 1311, Economic Research Forum, revised 21 Aug 2019.
    8. Kollie, Genesis B., 2022. "International Trade, Economic Growth and Governance: Evidence from ECOWAS Member Countries," African Journal of Economic Review, African Journal of Economic Review, vol. 10(3), June.
    9. Amélie GUILLIN & Isabelle RABAUD & Chahir ZAKI, 2022. "Does the Depth of Trade Agreements Matter for Trade in Services? Evidence from the MENA Region," LEO Working Papers / DR LEO 2984, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    10. Sinan Esen & Korhan Gokmenoglu, 2016. "Financial Centres Index and GDP Growth," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(4), pages 198-206, April.

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