The Determinants of Arab Countries Demand for Saudi Exports: Panel Data Evidence

Mohammed Abdullah Aljebrin


This study empirically estimates the critical parameters of export demand function for Saudi Arabia by using annual time series-cross section data (1984-2008) and by applying fixed effects model. The empirical results confirm that there exists a significant relationship among the real value of Saudi Arabia exports to Arab countries and trade partner's real income, relative export price, and trade partner's real exchange rates. The estimation results show that all variables have a significant relation and its theoretical expected sign (positive for both real income and real exchange rate but negative for relative price), and the elasticities of real income is larger than unity (elastic). But relative price and real exchange rate are smaller than unity (inelastic).

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Research in World Economy
ISSN 1923-3981(Print)ISSN 1923-399X(Online)


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