Exports of medicinal and aromatic plants are considered one of the important sectors in the Egyptian economy, as they play a major role in enhancing national income and increasing hard currency revenues, as they are characterized by the presence of a comparative advantage in their export due to their quality and contain chemical compounds and active substances that are used in the manufacture of medicines, medical drugs and cosmetics, in addition to their high export value, especially in light of the increasing global demand to replace closed drugs with natural compounds, so the scope is wide for producing these plants, in addition to being natural products that are safer for health than industrial products,
The development of these exports depends on several factors that can be analyzed using the gravity model, which is an economic model used to estimate the volume of trade between two countries based on the size of their economies, the distance between them and other factors, and the results indicate that some variables such as the gross domestic product of the importing country GDPc were statistically significant in several models, which indicates that it has a significant impact on trade flows As for the distance between the two countries Dij was not statistically significant in most of the models, indicating that geographical distance may not be a factor that significantly affects trade flows for these products, and the results indicate that some variables such as the exchange rate of the importing country EXijt and the instability index of the importing country Bijt the function was statistically significant in several models, which indicates that it has a significant impact on trade fiows for the seeds and fruits group, As for the distance between the two countries Dij was not statistically significant in most of the models, indicating that geographical distance may not be a significantly influential factor in the trade flows of these products, from the econometric point of view Panel EGLS is preferred because it provides more accurate estimates and takes into account random effects, which enhances the accuracy and generalizability of the results, and from a trade policy point of view Panel Least Squares (OLS) may be more appropriate. From a trade policy point of view,
Panel Least Squares (OLS) may be more appropriate because the results are easier to interpret and quicker to use in policy making, and the two models can be reconciled by using the results from EGLS to support advanced analyses, while OLS results are used to formulate and clarify trade policies for decision makers.
Conclusively, In light of its findings, the study recommends paying attention to the importing country's GDPc, the importing country's exchange rate EXijt, and the importing country's instability index Bijt when developing a foreign market penetration plan because of its statistically significant impact.