TradeperformanceandpotentialofNorthAfrican countries:Anapplicationofastochasticfrontier gravitymodel LotaD.Tamini HoussemEddineChebbi AbdessalemAbbassi Cahierderecherche/WorkingPaper2016-4

In fact, all but Egypt are founders of the Arab Maghreb Union (AMU), which was established in 1989 by the Treaty of Marrakech.1 In addition, the North African countries are members of the Greater Arab Free Trade Area (GAFTA), also known as the Pan-Arab Free Trade Area (PAFTA), with the exception of Mauritania, which is in the process of joining the organization. [...] The indicator variables of year are included to control for the potential impact of the economic crisis on the value of trade, and the years 2011 and 2012 control for the impact of the political change and the popular uprisings in Tunisia and Egypt. [...] A negative significant value of the distance is expected and the value of -2.557 is close to the results reported in the literature (See Head and Mayer, 2014).15 In addition, political tension influence trade and the coefficient of the variable representing the conflicting relationship between Algeria and Morocco is negative and significant as expected. [...] The results of the estimation using and OLS procedure (Specification [3]) are also close to those of the benchmark model for the distance and the variable Contiguity _ Algeria and the variable Morroco _ Algeria. [...] This result can be interpreted as evidence of Heckscher-Ohlin forces and accordingly, the more comparable the GDP per capita between trading partners, the greater is trade efficiency.16 Our model includes countries of origin and of destination as indicator variables, with Algeria as a country of reference.17 The value of -4.909 for Egypt as a country of destination indicates that the value of trad.