scholarly journals The Gravity Equation in International Trade

2009 ◽  
Author(s):  
Michele Fratianni
Keyword(s):  
International Trade ◽  
Bilateral Trade ◽  
Gravity Equation ◽  
Trade Flows ◽  
Empirical Success ◽  
Theoretical Support ◽  
Long Time ◽  
Bilateral Trade Flows ◽  
Alternative Hypotheses ◽  
State Of Affairs

This article aims to explain trade flows in terms of the gravity equation (GE). The reason for focusing on GE is twofold. The first is that GE, unlike other frameworks, has had great empirical success in explaining bilateral trade flows. For a long time, however, GE was a child without a father in the sense that it was thought to have no theoretical support. Since the late 1970s, this state of affairs has changed radically. Now, the gravity equation has strong theoretical support and can be derived from a variety of models of international trade. The second is that GE can be used to sort out alternative hypotheses of international trade.

scholarly journals International trade and endogenous standards: the case of GMO regulations

2012 ◽  
Vol 11 (3) ◽  
pp. 415-437 ◽  
Author(s):  
MAURO VIGANI ◽  
VALENTINA RAIMONDI ◽  
ALESSANDRO OLPER
Keyword(s):  
International Trade ◽  
Gravity Model ◽  
Bilateral Trade ◽  
Composite Index ◽  
Trade Flows ◽  
Agricultural Products ◽  
Approval Process ◽  
Bilateral Trade Flows ◽  
Gmo Regulation ◽  
Bilateral Differences

AbstractThis paper quantifies the effect of GMO regulation on bilateral trade flows of agricultural products. We develop a composite index of GMO regulations and using a gravity model we show that bilateral differences in GMO regulation negatively affect trade flows. This effect is especially driven by labeling, approval process, and traceability. Our results are robust to the endogeneity of GMO standards to trade flows.

Bilateral Trade Flows, The Gravity Equation, and Functional Form

1993 ◽  
Vol 75 (2) ◽  
pp. 266 ◽  
Author(s):  
Marcos Sanso ◽  
Rogelio Cuairan ◽  
Fernando Sanz
Keyword(s):  
Functional Form ◽  
Bilateral Trade ◽  
Gravity Equation ◽  
Trade Flows ◽  
Bilateral Trade Flows

Alliances, Preferential Trading Arrangements, and International Trade

1997 ◽  
Vol 91 (1) ◽  
pp. 94-107 ◽  
Author(s):  
Edward D. Mansfield ◽  
Rachel Bronson
Keyword(s):  
International Trade ◽  
Bilateral Trade ◽  
Trade Flows ◽  
Major Power ◽  
Political Incentives ◽  
Bilateral Trade Flows ◽  
Quantitative Analyses ◽  
Preferential Trading ◽  
Preferential Trading Arrangements ◽  
Type Of Institution

We analyze the effects of alliances and preferential trading arrangements on bilateral trade flows. Both factors are likely to promote trade among members, but we argue that the interaction between them is central to explaining patterns of commerce. The combination of an alliance, which creates political incentives for participants to engage in trade, and a commercial institution, which liberalizes trade among members, is expected to provide a considerable impetus to commerce among parties to both. The results of our quantitative analyses support these arguments. Both alliances and preferential trading arrangements strongly affected trade from 1960 to 1990, and allies that included a major power conducted considerably more trade than their nonmajor-power counterparts. Moreover, the interaction between alliances and preferential trading arrangements is fundamental to explaining patterns of bilateral commerce: Parties to a common preferential trading arrangement and a common alliance engage in markedly greater trade than do members of either type of institution but not both.

scholarly journals Determining the economic impact of cryptocurrency adoption on international trade from a gravity model framework

2021 ◽  
Author(s):  
Eric R. Chen
Keyword(s):  
International Trade ◽  
Gravity Model ◽  
Global Economy ◽  
Bilateral Trade ◽  
Trade Flows ◽  
Regression Analyses ◽  
Model Framework ◽  
Aggregated Data ◽  
Weak Institutions ◽  
Bilateral Trade Flows

As cryptocurrencies develop and circulate at greater rates, countries have appeared to consider the technology as an adoptable medium of exchange. By expanding the influence of cryptocurrencies through adoption, countries raise its impact on the global economy. This paper is the first to apply an augmented version of the gravity model to examine the effects of global cryptocurrency adoption on international trade. This empirical study involves aggregating datasets on U.S. bilateral trade flows, gravity variable statistics, and the adoption of cryptocurrencies. In application of the gravity model, regression analyses are used on the aggregated data to test the magnitude of cryptocurrencies’ impact on trade. Based on the overall findings, the variables for cryptocurrency adoption produce negative coefficients suggesting a negative correlation between the adoption of cryptocurrencies and international trade. The central tendency in the empirical evidence offers the interpretation that countries with weak institutions to promote trade are more likely to adopt cryptocurrencies resulting in a negative association between cryptocurrency adoption and trade.

scholarly journals ANALYSIS OF GEOGRAPHIC DISTANCE EFFECTS ON INTERNATIONAL TRADE FLOWS AS A PUBLIC POLICY: EVIDENCE FROM EAC AND NAFTA COUNTRIES.

2015 ◽  
Vol 10 (10) ◽  
pp. 2540-2549
Author(s):  
Laetitia Byukusenge ◽  
Song Wei ◽  
Delphine Tuyishime
Keyword(s):  
Developing Countries ◽  
International Trade ◽  
Bilateral Trade ◽  
Geographic Distance ◽  
Developed Countries ◽  
Trade Flows ◽  
Trade Barriers ◽  
Middle Income ◽  
Distance Effects ◽  
Bilateral Trade Flows

Previous studies have shown that the geographic distance is among the factors that can typically results in diminished trade flows between two or more countries. As the international trade is one among the public policies, the governments of countries have to take control policies about their imports and exports after signing some trade contracts or agreements of eliminating trade barriers between trade countries. This paper analyzes and compares how the geographic distance affects the international trade flows of developed and developing countries‟ economies and becomes the obstacle to the developing countries to achieve their objectives and goals in eliminating trade barriers between their trading partners. The gravity model with panel data sets for period of 2008 to 2011 are used to determine the geographic distance effects in those countries. The sample size is bilateral trade flows of eight developing countries with lower income of EAC and two developed countries and one developing country with middle income of NAFTA. The study discovers that the various factors influence the geographic distance effects on international trade flows of developed and developing countries in different ways. This paper recommends that the signed policies between countries should be observed, maintained and followed in order to achieve expected objectives.

scholarly journals Social Development and International Trade in Central Europe

Equilibrium ◽  
2012 ◽  
Vol 7 (2) ◽  
pp. 7-19
Author(s):  
Andrzej Cieślik ◽  
Jan Jakub Michałek ◽  
Jerzy Mycielski
Keyword(s):  
International Trade ◽  
Social Development ◽  
Bilateral Trade ◽  
Empirical Studies ◽  
Trade Flows ◽  
Development Indicators ◽  
Trading Partners ◽  
Bilateral Trade Flows ◽  
Standard Set ◽  
The Impact

In this paper we study the impact of social development on international trade in Central and Eastern Europe using the generalized gravity model. Many previous empirical studies which explored the determinants of trade flows, concentrated only on traditional gravity variables, such as the size of trading partners, factor abundance, technology differences or distance. In our study, in addition to the standard set of gravity variables, we examine the role of aggregate social development indicators such as Human Development Index and its components. Our results show that both aggregate and disaggregate measures of social development affect the volume of international trade flows. In particular, the education indexes seem to be positively related to bilateral trade flows.

Temporary Migration and Bilateral Trade Flows

World Economy ◽  
2009 ◽  
Vol 32 (5) ◽  
pp. 735-753 ◽  
Author(s):  
Marion Jansen ◽  
Roberta Piermartini
Keyword(s):  
Bilateral Trade ◽  
Trade Flows ◽  
Temporary Migration ◽  
Bilateral Trade Flows

scholarly journals Determinants of Bilateral Trade Flows

1986 ◽  
Vol 59 (4) ◽  
pp. 623 ◽  
Author(s):  
Rajendra K. Srivastava ◽  
Robert T. Green
Keyword(s):  
Bilateral Trade ◽  
Trade Flows ◽  
Bilateral Trade Flows

scholarly journals The Formation of AFTA and Trade Diversion: Evidence from China’s Agricultural Exports

2016 ◽  
Vol 17 (1) ◽  
pp. 25-36
Author(s):  
Nguyen Khanh Doanh ◽  
Jeehoon Lee ◽  
Yoon Heo
Keyword(s):  
Panel Data ◽  
Free Trade Agreement ◽  
Bilateral Trade ◽  
Trade Agreement ◽  
Trade Diversion ◽  
Trade Flows ◽  
Agricultural Products ◽  
Agricultural Exports ◽  
Trading Partners ◽  
Bilateral Trade Flows

This study analyzes the impacts of the formation of AFTA (ASEAN Free Trade Agreement) on China’s agricultural exports. The Hausman-Taylor analysis is applied to panel data collected from China and its 68 trading partners from 1993–2012. Our major findings areas follows. First, the discrimination in tariffs imposed by AFTA diverts trade in agricultural products from China toward AFTA’s member countries. Second, at the sectoral level, the trade diversion effects of AFTA’s formation on China’s exports are significant in the case of beverage and tobacco industries. AFTA and China need to focus more on diversifying and differentiating their farming products. To gain better access to AFTA’s market, more investment in research and development activities is recommended as a cure for Chinese farmers. Moreover, this study implies that more efforts in reducing tariff and non-tariff barriers to further liberalize trade between China and AFTA could enhance their bilateral trade flows.

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