The Impact of Jordan Free Trade Agreements on Trade Flows

Taleb Awad-Warrad; Murad Ahmad Al Tarawneh

doi:doi:10.11648/j.ijber.20200904.19

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The Impact of Jordan Free Trade Agreements on Trade Flows

Taleb Awad-Warrad, Murad Ahmad Al Tarawneh

Published in International Journal of Business and Economics Research (Volume 9, Issue 4)

Received: 1 June 2020 Accepted: 15 June 2020 Published: 4 July 2020

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Abstract

This study aimed to evaluate the impact of Jordan Free Trade Agreements (FTAs) with 17 Arab countries (Greater Arab Free Trade Area (GAFTA)), United States of America (USA) and European Union (EU) on Jordan trade flows. A Gravity model is used to estimate the impact of FTAs in term of trade creation and trade diversion. The study utilizes a panel data sample coving 125 selected countries trading with Jordan for the period 1997-2017. The study used Feasible Generalized Least Squares (FGLS) to estimate the Gravity model. The study results showed a significant impact of Jordan Gross Domestic Product (GDP), trade partners GDP, Jordan GDP Per Capita (GDPC), trade partners GDPC, distance, common language and border variables on Jordan trade. Further, the differences between Jordan and trade parents GDPs showed an insignificant impact on Jordan trade which implies that most of Jordan trade is among trade partners whom have significant different size of GDP. Furthermore, Jordan – EU agreement showed a significant imports trade creation and exports trade diversion. Jordan – USA agreement showed an imports trade diversion and extra regional exports expansion. Finally, Jordan – GAFTA agreement has a significant import and exports trade creation.

Published in	International Journal of Business and Economics Research (Volume 9, Issue 4)
DOI	10.11648/j.ijber.20200904.19
Page(s)	228-233
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2020. Published by Science Publishing Group

Keywords

Impact, Trade Creation, Trade Diversion, Free Trade Agreements, Jordan, Gravity Model, FGLS

References

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[6]	Carre`re, Ce` line. ""Revisiting the effects of regional trade agreements on trade flows with proper specification of the gravity model."" European Economic Review 50, no. 2 (2006): 223-247.
[7]	Cooper, William. Free Trade Agreements: Impact on U.S. Trade and Implications for U.S. Trade Policy. Congressional Research Service, 2014.
[8]	Darma, W. S. & Hastiadi, F. F., 2017. Trade Creation and Trade Diversion Effects of the ASEAN-China Free Trade Agreement, ASEAN-Korea Free Trade Agreement, and ASEAN-India Free Trade Agreement Implementation on the Exports of Indonesia’s Food and Beverages Industry Products. International Journal of Economics and Financial Issues 7, no. (6): 51-58.
[9]	Ekanayake, E. M., Amit Mukherjee, and Bala Veeramacheneni. ""Trade Blocks and the Gravity Model: A Study of Economic Integration among Asian Developing Countries."" Journal of Economic Integration 25, no. 4 (December 2010): 627-643.
[10]	El-Anis, Imad. ""A review of trade liberalisation and trade between Jordan and the United States."" International Journal of Peace and Development Studies 4, no. 6 (2013): 116-124.
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[13]	Magee, Christopher S. P. ""Trade creation, trade diversion, and the general equilibrium effects of regional trade agreements: a study of the European Community–Turkey customs union."" Rev World Econ 2016, no. 152 (2015): 383–399.
[14]	C. Sattayanuwat, W. & Tangvitoontham, N., 2017. Trade Creation and Trade Diversion of ASEAN’s Preferential Trade Agreements. IAFOR Journal of the Social Sciences 3, no. (1): 5-20.
[15]	Soufan, Thikraiat. ""Factors that Affect Jordan's exports During the Period (2003-2012)."" International Journal of Business and Social Science 5, no. 6 (1) (2014): 115-121.
[16]	Tinbergen, J. Shaping the World Economy; Suggestions for an International Economic Policy. Books (Jan Tinbergen). New York: Twentieth Century Fund, 1962.
[17]	World Bank Data. 2019.
[18]	Zidi, Ahmed, and Saïd Miloud Dhifallah. ""Trade Creation and Trade Diversion between Tunisia and EU: Analysis by Gravity Model."" International Journal of Economics and Finance 5, no. 5 (2013): 131-147.

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APA Style

Taleb Awad-Warrad, Murad Ahmad Al Tarawneh. (2020). The Impact of Jordan Free Trade Agreements on Trade Flows. International Journal of Business and Economics Research, 9(4), 228-233. https://doi.org/10.11648/j.ijber.20200904.19

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ACS Style

Taleb Awad-Warrad; Murad Ahmad Al Tarawneh. The Impact of Jordan Free Trade Agreements on Trade Flows. Int. J. Bus. Econ. Res. 2020, 9(4), 228-233. doi: 10.11648/j.ijber.20200904.19

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AMA Style

Taleb Awad-Warrad, Murad Ahmad Al Tarawneh. The Impact of Jordan Free Trade Agreements on Trade Flows. Int J Bus Econ Res. 2020;9(4):228-233. doi: 10.11648/j.ijber.20200904.19

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@article{10.11648/j.ijber.20200904.19,
  author = {Taleb Awad-Warrad and Murad Ahmad Al Tarawneh},
  title = {The Impact of Jordan Free Trade Agreements on Trade Flows},
  journal = {International Journal of Business and Economics Research},
  volume = {9},
  number = {4},
  pages = {228-233},
  doi = {10.11648/j.ijber.20200904.19},
  url = {https://doi.org/10.11648/j.ijber.20200904.19},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20200904.19},
  abstract = {This study aimed to evaluate the impact of Jordan Free Trade Agreements (FTAs) with 17 Arab countries (Greater Arab Free Trade Area (GAFTA)), United States of America (USA) and European Union (EU) on Jordan trade flows. A Gravity model is used to estimate the impact of FTAs in term of trade creation and trade diversion. The study utilizes a panel data sample coving 125 selected countries trading with Jordan for the period 1997-2017. The study used Feasible Generalized Least Squares (FGLS) to estimate the Gravity model. The study results showed a significant impact of Jordan Gross Domestic Product (GDP), trade partners GDP, Jordan GDP Per Capita (GDPC), trade partners GDPC, distance, common language and border variables on Jordan trade. Further, the differences between Jordan and trade parents GDPs showed an insignificant impact on Jordan trade which implies that most of Jordan trade is among trade partners whom have significant different size of GDP. Furthermore, Jordan – EU agreement showed a significant imports trade creation and exports trade diversion. Jordan – USA agreement showed an imports trade diversion and extra regional exports expansion. Finally, Jordan – GAFTA agreement has a significant import and exports trade creation.},
 year = {2020}
}

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TY  - JOUR
T1  - The Impact of Jordan Free Trade Agreements on Trade Flows
AU  - Taleb Awad-Warrad
AU  - Murad Ahmad Al Tarawneh
Y1  - 2020/07/04
PY  - 2020
N1  - https://doi.org/10.11648/j.ijber.20200904.19
DO  - 10.11648/j.ijber.20200904.19
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 228
EP  - 233
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20200904.19
AB  - This study aimed to evaluate the impact of Jordan Free Trade Agreements (FTAs) with 17 Arab countries (Greater Arab Free Trade Area (GAFTA)), United States of America (USA) and European Union (EU) on Jordan trade flows. A Gravity model is used to estimate the impact of FTAs in term of trade creation and trade diversion. The study utilizes a panel data sample coving 125 selected countries trading with Jordan for the period 1997-2017. The study used Feasible Generalized Least Squares (FGLS) to estimate the Gravity model. The study results showed a significant impact of Jordan Gross Domestic Product (GDP), trade partners GDP, Jordan GDP Per Capita (GDPC), trade partners GDPC, distance, common language and border variables on Jordan trade. Further, the differences between Jordan and trade parents GDPs showed an insignificant impact on Jordan trade which implies that most of Jordan trade is among trade partners whom have significant different size of GDP. Furthermore, Jordan – EU agreement showed a significant imports trade creation and exports trade diversion. Jordan – USA agreement showed an imports trade diversion and extra regional exports expansion. Finally, Jordan – GAFTA agreement has a significant import and exports trade creation.
VL  - 9
IS  - 4
ER  -

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Author Information

Taleb Awad-Warrad

Department of Business Economic, Faculty of Business, University of Jordan, Amman, Jordan
Murad Ahmad Al Tarawneh

Department of Business Economic, Faculty of Business, University of Jordan, Amman, Jordan

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APA Style

Taleb Awad-Warrad, Murad Ahmad Al Tarawneh. (2020). The Impact of Jordan Free Trade Agreements on Trade Flows. International Journal of Business and Economics Research, 9(4), 228-233. https://doi.org/10.11648/j.ijber.20200904.19

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ACS Style

Taleb Awad-Warrad; Murad Ahmad Al Tarawneh. The Impact of Jordan Free Trade Agreements on Trade Flows. Int. J. Bus. Econ. Res. 2020, 9(4), 228-233. doi: 10.11648/j.ijber.20200904.19

Copy | Download

AMA Style

Taleb Awad-Warrad, Murad Ahmad Al Tarawneh. The Impact of Jordan Free Trade Agreements on Trade Flows. Int J Bus Econ Res. 2020;9(4):228-233. doi: 10.11648/j.ijber.20200904.19

Copy | Download

@article{10.11648/j.ijber.20200904.19,
  author = {Taleb Awad-Warrad and Murad Ahmad Al Tarawneh},
  title = {The Impact of Jordan Free Trade Agreements on Trade Flows},
  journal = {International Journal of Business and Economics Research},
  volume = {9},
  number = {4},
  pages = {228-233},
  doi = {10.11648/j.ijber.20200904.19},
  url = {https://doi.org/10.11648/j.ijber.20200904.19},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20200904.19},
  abstract = {This study aimed to evaluate the impact of Jordan Free Trade Agreements (FTAs) with 17 Arab countries (Greater Arab Free Trade Area (GAFTA)), United States of America (USA) and European Union (EU) on Jordan trade flows. A Gravity model is used to estimate the impact of FTAs in term of trade creation and trade diversion. The study utilizes a panel data sample coving 125 selected countries trading with Jordan for the period 1997-2017. The study used Feasible Generalized Least Squares (FGLS) to estimate the Gravity model. The study results showed a significant impact of Jordan Gross Domestic Product (GDP), trade partners GDP, Jordan GDP Per Capita (GDPC), trade partners GDPC, distance, common language and border variables on Jordan trade. Further, the differences between Jordan and trade parents GDPs showed an insignificant impact on Jordan trade which implies that most of Jordan trade is among trade partners whom have significant different size of GDP. Furthermore, Jordan – EU agreement showed a significant imports trade creation and exports trade diversion. Jordan – USA agreement showed an imports trade diversion and extra regional exports expansion. Finally, Jordan – GAFTA agreement has a significant import and exports trade creation.},
 year = {2020}
}

Copy | Download

TY  - JOUR
T1  - The Impact of Jordan Free Trade Agreements on Trade Flows
AU  - Taleb Awad-Warrad
AU  - Murad Ahmad Al Tarawneh
Y1  - 2020/07/04
PY  - 2020
N1  - https://doi.org/10.11648/j.ijber.20200904.19
DO  - 10.11648/j.ijber.20200904.19
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 228
EP  - 233
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20200904.19
AB  - This study aimed to evaluate the impact of Jordan Free Trade Agreements (FTAs) with 17 Arab countries (Greater Arab Free Trade Area (GAFTA)), United States of America (USA) and European Union (EU) on Jordan trade flows. A Gravity model is used to estimate the impact of FTAs in term of trade creation and trade diversion. The study utilizes a panel data sample coving 125 selected countries trading with Jordan for the period 1997-2017. The study used Feasible Generalized Least Squares (FGLS) to estimate the Gravity model. The study results showed a significant impact of Jordan Gross Domestic Product (GDP), trade partners GDP, Jordan GDP Per Capita (GDPC), trade partners GDPC, distance, common language and border variables on Jordan trade. Further, the differences between Jordan and trade parents GDPs showed an insignificant impact on Jordan trade which implies that most of Jordan trade is among trade partners whom have significant different size of GDP. Furthermore, Jordan – EU agreement showed a significant imports trade creation and exports trade diversion. Jordan – USA agreement showed an imports trade diversion and extra regional exports expansion. Finally, Jordan – GAFTA agreement has a significant import and exports trade creation.
VL  - 9
IS  - 4
ER  -

Copy | Download