scholarly journals An extended gravity model with substitution applied to international trade

2011 ◽  
pp. 135-162 ◽  
Author(s):  
J. A. Bikker
Keyword(s):  
International Trade ◽  
Gravity Model ◽  
Extended Gravity

Free Trade Agreement between Tunisia and the European Union, Do Institutions Matter?: An Empirical Validation by A Gravity Model

2015 ◽  
Vol 5 (2) ◽  
pp. 19-36
Author(s):  
Anis Kacem
Keyword(s):  
European Union ◽  
International Trade ◽  
Gravity Model ◽  
Free Trade ◽  
Spatial Econometrics ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
The European Union ◽  
Institutional Dimension ◽  
North And South

Tunisia has signed a free trade agreement with the European Union in 1996, which provides for the reduction of tariff barriers between Tunisia and the EU. In this article, we aim to know and test whether the similarity of the institutional framework has to stimulate international trade between Tunisia and the European Union. In this context, we built a variable called “Institutional distance” to valid the institutional dimension of international trade, near borders effects reported in the literature. To this end, a gravity model was used initially (Tunisia and 21 European countries). Secondly, the estimate shows the existence of spatial autocorrelation. The latter has been corrected using spatial econometrics. The results show that the geographical distance remains more important than the institutions in this type of agreement between north and south shores of the Mediterranean.

scholarly journals Import Flows of Bangladesh: Gravity Model Approach under Panel Data Methodology

2012 ◽  
Vol 60 (2) ◽  
pp. 153-157 ◽  
Author(s):  
Mili Roy ◽  
Md. Israt Rayhan
Keyword(s):  
Panel Data ◽  
Gravity Model ◽  
Cross Section ◽  
Time Series Data ◽  
Random Effect ◽  
Least Square ◽  
Series Data ◽  
Ordinary Least Square ◽  
Extended Gravity ◽  
Trading Partners

In counterpoint to export growth, Bangladesh import growth has remained much less strong, despite impressive progress in import liberalization. This study gives an overview of different methodologies related to gravity model analysis in Bangladesh’s import flow. A pooled cross section and time series data were analyzed to incorporate the country specific heterogeneity in country pair trading partners. The import flows are justified by the basic gravity model since Bangladesh’s imports are positively significant by the economy size and inversely related to trade barrier. Accordingly, we have analyzed pooled ordinary least square, fixed effect, random effect. This study also explores extended gravity model using several variables in the light of gravity model panel data approach. Bangladesh’s import is determined by the home and foreign country’s gross domestic product and exchange rate. In addition, Cross section results show that regional trade arrangement which is South Asian Association for Regional Co-operation and border are significant for Bangladesh’s importimplies that Bangladesh should import more from intra regional country and also should import from India.DOI: http://dx.doi.org/10.3329/dujs.v60i2.11485 Dhaka Univ. J. Sci. 60(2): 153-157, 2012 (July)  

scholarly journals The Effect of Corruption on International Trade: A Case Study of Indonesian Trade to Nine Countries

2018 ◽  
Vol 13 (1) ◽  
Author(s):  
Danang Ibnu Atsir ◽  
Sunaryati Sunaryati
Keyword(s):  
International Trade ◽  
Maximum Likelihood ◽  
Gravity Model ◽  
Bilateral Trade ◽  
Panel Data Analysis ◽  
Random Effect ◽  
Likelihood Method ◽  
Geographical Distance ◽  
Pseudo Maximum Likelihood

Corruption is a form of abuse of ethical authority by public officials, which is divided into two parts: bribery and forced collection. The effect of corruption like bribes and illegal levies is widespread in the public sector. One interesting investigation is the effect of corruption on international trade. Corruption becomes a barrier in international trade, where corruption plays a role in the access of trade goods and services from within and abroad. Using the gravity model, the focus of this research was the effect of corruption on international trade by taking a case study of Indonesia’s bilateral trade with its nine largest export destination countries. Using panel data, analysis tools used in this research were common effect, fixed effect, random effect and poisson pseudo maximum likelihood (PPML). In this research, it was found that geographical distance variable in its fixed units caused the omitted variable so that the error term correlated with independent variables. In order to overcome the problem, poisson pseudo maximum likelihood method was used in performing regression gravity model with linear log form, so the omitted variable issue on the geographical distance can be eliminated. The results of this research concluded that corruption played a role in international trade through bureaucratic mechanisms of trade and investment licensing and the effect of corruption was more detrimental to exporters.Keywords:   Gravity Model, Corruption, International Trade, Poisson Pseudo Maximum Likelihood (PPML).

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