Merchandise Import Demand Function in Saudi Arabia

Applied Economics and Finance, Vol. 2, No. 1; February 2015, ISSN 2332-7294 E-ISSN 2332-7308. Published by Redfame Publishing

11 Pages Posted: 29 Dec 2014 Last revised: 8 Jan 2015

See all articles by M. Ibrahim

M. Ibrahim

Aswan University, Department of Economics

Date Written: February 1, 2015

Abstract

Merchandise imports in Saudi Arabia is growing steadily and very rapidly, at an average growth rate of 10.04 percent/year during 1975-2011. So, this study is very important to know the merchandise imports determinants in Saudi Arabian economy. This study empirically estimates the critical parameters of merchandise import demand determinants for Saudi Arabia by using Ordinary Least Squares (OLS) approach and Error Correction model during the period (1975-2011). The empirical results obtained show that, in both long run and short run, there are positive and significant relationships between the demand for merchandise import and real gross domestic product, gross capital formation expenditure, private consumption expenditure, government consumption expenditure and the relative price of imports to domestic price. On the other hand, there are positive but insignificant relationship between the demand for merchandise import and international reserves either in the long run or the short run.

Keywords: C22, F62, P33

JEL Classification: International Trade, Merchandise Import Demand, Error Correction model, Saudi Arabia.

Suggested Citation

Ibrahim, Mohamed, Merchandise Import Demand Function in Saudi Arabia (February 1, 2015). Applied Economics and Finance, Vol. 2, No. 1; February 2015, ISSN 2332-7294 E-ISSN 2332-7308. Published by Redfame Publishing , Available at SSRN: https://ssrn.com/abstract=2543300

Mohamed Ibrahim (Contact Author)

Aswan University, Department of Economics ( email )

Egypt, Aswan
Aswan, 81524
Egypt

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