An Econometric and Analytical Study of the Impact of External Debt on Net Exports: Evidence from Selected Middle East and North Africa (MENA) Countries

Abstract

This study investigates the impact of external debt on net exports in four non-oil countries (Egypt, Turkey, Morocco, and Jordan) from (2000–2022), incorporating FDI as a control variable. The research employed the (Panel ARDL) approach and the Unconstrained Error Correction Model (UECM), using the Driscoll–Kraay estimator to ensure robust estimates against cross-sectional dependence. Results confirmed a long-term equilibrium relationship, with a significant error correction coefficient of )-0.57(. Estimates revealed a significant negative impact of external debt on trade performance in both the short and long run, suggesting that excessive debt reliance deepens trade deficits. Based on these findings for the selected sample, policy recommendations were provided for the Syrian economy during its reconstruction phase to enhance external stability and mitigate structural imbalances in the trade balance.