Determinants of Intra-GCC Food Trade

Abstract

Using panel data for six Gulf Cooperation Council (GCC) countries from 1995–2014, we assess the impacts of several major economic variables on intra-GCC food exports, and on GCC food exports to the world. The GCC customs union had minimal impact on intra-GCC food exports, but occasioned a significant reduction in GCC food exports. Unlike GCC food exports, intra-GCC food exports occurred among countries with similar relative factor endowments, in agreement with the Linder Hypothesis. Rising incomes and exchange rates played significant roles in both intra-GCC food exports and GCC food exports, while distance has lost its once-dominant role.