The Impact of Jordan Free Trade Agreements on Trade Flows
International Journal of Business and Economics Research
Volume 9, Issue 4, August 2020, Pages: 228-233
Received: Jun. 1, 2020; Accepted: Jun. 15, 2020; Published: Jul. 4, 2020
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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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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.
Impact, Trade Creation, Trade Diversion, Free Trade Agreements, Jordan, Gravity Model, FGLS
To cite this article
Taleb Awad-Warrad, Murad Ahmad Al Tarawneh, The Impact of Jordan Free Trade Agreements on Trade Flows, International Journal of Business and Economics Research. Vol. 9, No. 4, 2020, pp. 228-233. doi: 10.11648/j.ijber.20200904.19
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