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Article Title: Evaluation of Ethiopia's Bilateral and Potential Exports in the Middle East: A Gravity Model Approach
by Abdulaziz Aragie Kassa

Abstract:
This study is conducted with the aim of identifying the main determinants of Ethiopia's bilateral exports and addresses the question of whether Ethiopia has untapped export potentials with the Middle Eastern Countries or not. It analysis the major determinants of Ethiopian's bilateral exports and explores the unexploited export potentials that the country may have in the Middle East using two different methods. First, the augmented gravity model estimated by G2SLS estimation technique using 13 years data of 15 exporting partners. The estimated coefficients then used to analyze the existing bilateral export and predict the export potential that the country could have in the three Middle Eastern countries. Accordingly, GDPpc of both exporting and importing countries found to have positive and significant impact on Ethiopia's bilateral exports whereas, distance between countries negatively affect their bilateral trade . In this light, the export potentials of the country are estimated using the estimated coefficients of the gravity model. Accordingly, Ethiopia has the highest unexploited potential in U.A. E and significant amount in Saudi Arabia. Secondly, using the ITC measure, the potential to increase Ethiopian's export in these countries and the top 20 commodities that highly contribute to increase the county's export potential are also identified. The finding of this index shows that gold, coffee and tea, fruits and vegetables, live animals, meat and meat preparations and cut flowers are among the products that have the highest potentials to increase Ethiopia's Export in the Middle East.

Keywords: gravity model, export potentials, index of trade conformity, Middle East.

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