—This study investigates export potential of Bahrain with its bilateral trading partners using augmented version of gravity model on panel data of 31 trading partners for the period of 1994 to 2013. The panel generalized least square estimation technique is used to explain macroeconomic behavior of export flows. The results show that the gravity model explain bilateral export flows of Bahrain. Among augmented variables, real exchange rate depreciation and foreign currency reserves of partner countries have significant positive effect on export flows of Bahrain. FTA and GCC dummy have significant positive effect on export flows which shows importance of free trade agreement and Gulf economic integration. The estimation of export potential identified potential markets for exports of Bahrain among selected trading partners. The study urges diversification and development of domestic industries to target potential export markets for economic growth and sustainable development.
—Export potential, sustainable development, economic integration, gravity model.
Abdul Waheed is with University of Bahrain, Kingdom of Bahrain (e-mail: firstname.lastname@example.org).
Shujaat Abbas is with University of Karachi, Pakistan (e-mail: email@example.com).
Cite: Abdul Waheed and Shujaat Abbas, "Potential Export Markets for Bahrain: A Panel Data Analysis," International Journal of Trade, Economics and Finance vol.6, no.3, pp. 165-169, 2015.