Abstract
This study aimed to measure the impact of exports on economic growth in Palestine during the period 1995–2019, using four variables. The dependent variable is gross domestic product (GDP), representing economic growth, while the explanatory variables are exports, capital accumulation, and compensation of employees. Regression analysis (both simple and multiple) was employed, incorporating a dummy variable to account for political factors. The results showed that each variable—exports, capital accumulation, and compensation of employees—had a significant impact. However, the study found that exports carried a negative sign and had a negative impact on economic growth. This is likely attributed to Israeli-imposed closures and sieges for security reasons, particularly as 90% of Palestinian exports are directed to Israel. This heavy reliance on Israel makes Palestinian exports highly vulnerable to Israeli practices. Additionally, Palestinian exports are largely manufactured using imported raw materials, which are subject to high costs and strict Israeli control over their entry. This limits their competitiveness in both international and Arab markets. Conversely, the study revealed that capital accumulation and compensation of employees had a positive impact on economic growth in Palestine. The study concluded by recommending further investigation into the underlying reasons for the negative impact of exports on economic growth in Palestine. It also suggested exploring strategies and solutions to strengthen the export sector, aligning it with the Export-Led Growth (ELG) hypothesis to positively contribute to economic growth.
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