المستخلص: |
This study empirically estimates the critical parameters of real value of merchandise exports demand determinants for Egypt by using annual time series-cross section data (1995-2015) and by applying fixed effects model. Our estimation results show that all variables have its theoretical expected sign {positive for both real income and relative exchange rates but negative for relative price). The empirical results confirm that in the long run there exists positive and significant relationship among the real value of merchandise exports and both of partner's real income and relative exchange rates but negative and significant for relative export prices. On the other hand, in the short run, there exists a positive and significant relationship between the real value of merchandise exports and partner's real income but negative and significant for relative export prices. There is also positive but insignificant relationship between real value of merchandise exports and relative exchange rates. If real value of merchandise exports are one percent out of equilibrium, a 34 percent adjustment towards equilibrium will take place within the first year. These results can be used to improving the current account deficit in Egypt by increasing exports. Besides that, we must focus economic policies in Egypt to provide more incentives for exporters, and we must re-consider the various legislation and regulations concerning the exporting process to simplify the requirements of the multiple and complex procedures, making the whole process less complicated. JEL Classification: C23, F13, F14.
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