Title: Estimation of the export demand function using panel data: the case of Israel

Authors: Doron Lavee; Azzaddin Agbareia; Tal Shvartzman

Addresses: Department of Economics and Management, Tel-Hai College, Upper Galilee 12210, Israel; Pareto Group Ltd., 7 Giborei Israel Street, Netanya, Israel ' Pareto Group Ltd., 7 Giborei Israel Street, Netanya, Israel ' Pareto Group Ltd., 7 Giborei Israel Street, Netanya, Israel

Abstract: This paper presents an econometric analysis of the variables determining Israel's exports to its main trade partners. Our analysis employs a panel data estimation technique, allowing us to compare the impact of the different variables in different countries. The study utilises an advanced econometric method to analyse non-stationary in panel data and test for a cointegration relationship. The results reveal a unit elasticity of Israeli exports to a trade partner's total imports, an elasticity of exports to the real exchange rate of less than one; a significant impact of trade agreements; and a positive elasticity of exports to a corruption index variable. Moreover, we show that the magnitude of the impact of these variables may vary considerably between different trade partners.

Keywords: export demand; econometric analysis; trade agreements; Israel; exports; imports; corruption; exchange rates; trade partners.

DOI: 10.1504/IJTGM.2016.081149

International Journal of Trade and Global Markets, 2016 Vol.9 No.4, pp.305 - 324

Received: 25 Sep 2015
Accepted: 06 Mar 2016
Published online: 24 Dec 2016 *

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