scholarly journals The Gravity Model Approach: An Application on the Eco Was Trading Bloc

2016 ◽  
Vol 11 (1) ◽  
pp. 67-75 ◽  
Author(s):  
Afolabi O. Luqman ◽  
Nor Aznin Abu Bakar ◽  
Azman Aziz Mukhriz Izraf
Keyword(s):  
Gravity Model ◽  
Bilateral Trade ◽  
Strong Relationship ◽  
Trade Flows ◽  
Gravity Models ◽  
Trade Integration ◽  
Regional Trade ◽  
Trading Bloc ◽  
Bilateral Trade Flows ◽  
Model Approach

Abstract This study aims to examine bilateral trade flows across ECOWAS-15 nations with the use of a panel and cross section for the period of 1981-2013. The methodology carried out to achieve this objective involves the use of various techniques of estimation for the gravity model (Static and dynamic). More specifically, this study aims to investigate the formational impact of regional trade integration agreements on trade flows within a group of countries using the same currencies and ECOWAS at large. The main use of regional variables into gravity models is intended to determine whether RTAs lead to trade creation, or diversion. The results show the presence of a strong relationship among the factors of both RIAs and trade flows.

scholarly journals Regional Integration in South Asia: An Analysis of Trade Flows Using the Gravity Model

2010 ◽  
Vol 49 (2) ◽  
pp. 105-118 ◽  
Author(s):  
Naseem Akhter ◽  
Ejaz Ghani
Keyword(s):  
Gravity Model ◽  
Regional Integration ◽  
Bilateral Trade ◽  
Trade Agreement ◽  
Jel Classification ◽  
Trade Flows ◽  
Regional Trade ◽  
Trade Effect ◽  
Bilateral Trade Flows ◽  
Trade Potential

The study deals with trade benefits from the free trade agreement of the SAARC countries. It assesses the trade potential and trade creation with member and non-member countries. The gravity model has been used to measure the bilateral trade flows and to assess the trade effect for member and non-member countries. Two analyses estimate the gravity model. The first analysis is based on crosssectional data to capture the trade effect individually each year; and the second analysisutilises the pooled data to measure the overall trade effects and trade flows for the period 2003 to 2008. The results from the two approaches show that estimated coefficients are consistent with the model assumptions. Both analyses show that the regional trade agreement of the SAARC countries could divert the trade for member countries as well as for the non-member countries. However, trade volume will increase only if the major partners (Pakistan, India, and Sri Lanka) sign regional trade agreements. JEL classification: F15 Keywords: Trade; Regional Integration; Gravity Model

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.

scholarly journals Trade regimes and bilateral trade in the EU enlargement process: Focus on the Western Balkans

2015 ◽  
Vol 65 (2) ◽  
pp. 249-270 ◽  
Author(s):  
Radmila Dragutinović-Mitrović ◽  
Predrag Bjelić
Keyword(s):  
Bilateral Trade ◽  
Eu Enlargement ◽  
Special Focus ◽  
Trade Integration ◽  
Western Balkans ◽  
Regional Trade ◽  
Balkan Countries ◽  
Trade Regimes ◽  
Bilateral Trade Flows ◽  
The Eu

This paper aims at investigating the role of different trade regimes in determining the bilateral trade of Western Balkan countries and the enlarged European Union between 2001—2010. Special focus is laid on the intra-regional trade of Western Balkan countries and complementarities of this sub-regional trade integration and the EU accession process. Using panel data, we estimated the gravity model of bilateral exports from Western Balkan and Central Eastern European countries to the core EU members in the 2001–2010 period. The results confirm the importance of EU membership for the development of acceding countries’ trade and shed light on asymmetrical trade regimes as important factors of boosting the bilateral trade flows. Additionally, CEFTA 2006 has a significant contribution to intra-regional Western Balkans trade.

scholarly journals Recent Experience and Future Prospects of Pakistan’s Trade with China

2009 ◽  
Vol 14 (Special Edition) ◽  
pp. 87-110 ◽  
Author(s):  
Musleh-ud Din Musleh-ud Din ◽  
Ejaz Ghani ◽  
Usman Qadir
Keyword(s):  
Gravity Model ◽  
Free Trade ◽  
Free Trade Agreement ◽  
Bilateral Trade ◽  
Trade Agreement ◽  
Trade Flows ◽  
Recent Experience ◽  
Future Prospects ◽  
Short Term ◽  
Bilateral Trade Flows

This paper examines the prospects of expanding bilateral trade between Pakistan and China particularly in the context of the recently signed free trade agreement between the two countries. Using the augmented gravity model in the tradition of Rose (2004), the paper shows that there is significant potential for the expansion of bilateral trade between the two countries as a result of the free trade agreement. The paper also analyzes bilateral trade flows between the two countries in terms of a trade specialization index and the Grubel-Lloyd index of intra-industry trade. We show that bilateral trade between the two countries is heavily tilted in favor of China and that this situation may persist in the short term.

scholarly journals INSTITUTIONS AND INTRA-REGIONAL TRADE IN CEFTA 2006: A GRAVITY APPROACH

2019 ◽  
Vol 1 (17) ◽  
pp. 11
Author(s):  
Łukasz Klimczak ◽  
Jelena Trivić
Keyword(s):  
Free Trade ◽  
Bilateral Trade ◽  
Free Trade Agreements ◽  
Trade Agreements ◽  
Trade Flows ◽  
Positive Sign ◽  
Regional Trade ◽  
Bilateral Trade Flows ◽  
The Impact

The purpose of this paper is to identify factors that had an influence on bilateral trade flows among the CEFTA countries with special emphasize: 1) on the role of CEFTA agreement and its preceding network of bilateral free trade agreements, and 2) on the role of institutions in facilitating intra-regional trade. In order to assess the impact of these variables on trade, we employed an augmented gravity model based on panel data of the CEFTA countries in fifteen years period (2000-2014). The results of the research suggest that there was a positive and statistically significant role of the CEFTA agreement on trade between its parties but the influence of the preceding bilateral free trade agreements was even higher. Results also showed that institutions can play an important role as trade facilitators, but mainly in the importing country while in the exporting country only three of six variables showed to have a positive sign.

scholarly journals What Determines Bilateral Trade Flows? Evidence from ECO Region

2019 ◽  
Vol 5 (1) ◽  
pp. 165-182 ◽  
Author(s):  
Muhammad Ramzan Sheikh ◽  
Ruth Kattumuri ◽  
Imran Sharif Chaudhry ◽  
Abodh Kumar
Keyword(s):  
Economic Growth ◽  
Modified Gravity ◽  
Bilateral Trade ◽  
Trade Flows ◽  
Least Square ◽  
Gravity Models ◽  
Trade Model ◽  
Least Square Regression ◽  
Bilateral Trade Flows ◽  
Gravity Trade Model

This study provides an analysis of Pakistan’s bilateral trade in Economic Corporation Organization (ECO) region. The main purpose of this study is to assess the determinants of bilateral trade flows using the gravity trade model. Panel least square regression has been applied over the period of 1995 to 2015. Two types of gravity models have been estimated: traditional gravity trade model and modified gravity trade model. The study has identified income, population, distance, adjacency, area, landlockedness, continent and terrorism as the main drivers of Pakistan’s bilateral trade flows with ECO countries. It is suggested that policies in Pakistan should focus on improving economic growth; offer incentives to Pakistani people to engage more in trade flows; improve transportation to trade with ECO countries; and take measures to eradicate terrorism.

scholarly journals Globalization and export flows between Eurasian Economic Union countries: a gravity model approach

2020 ◽  
Vol 74 ◽  
pp. 06001
Author(s):  
Juliet Abakumova ◽  
Olena Primierova
Keyword(s):  
Gravity Model ◽  
Positive Impact ◽  
Gravity Models ◽  
Trade Integration ◽  
Transport Costs ◽  
Integration Model ◽  
Time Estimates ◽  
Eurasian Economic Union ◽  
Model Approach

In the empirical tools for the research of trade integration a special place is occupied by gravity models, insofar as these models have rather high accuracy in explaining mutual trade flows. Recently, however, the gravity model approach has been subjected to critical rethinking: globalization brought considerable changes not only in economic growth, but also in international trade, what allowed speaking about a “Death of Distance”. At the same time, estimates based on gravity models almost always demonstrated an increase in the coefficient of distance as a proxy for transport costs, which contradicts the general perception of the phenomenon of globalization. The paper is devoted to testing the validity of inclusion of the globalization index in the model, which would allow consider the role of globalization in bilateral cross-country trade, as well as testing the hypothesis of reducing the coefficient of distance. Based on the annual panel data over the period 2000-2016 the trade integration model for the EEU countries was estimated. To test the hypothesis of a decrease in the estimated coefficient of distance over time, the gravity model was also evaluated at different time intervals. And the positive impact of the globalization factor on the volume of exports is revealed.

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.

Sign in / Sign up

Export Citation Format

Share Document