scholarly journals THE EFFECT OF TRADE FACILITATION ON TRADE MARGIN OF 8 ASEAN-CHINA FREE TRADE AREA COUNTRIES (ACFTA): A GRAVITY MODEL APPROACH

2017 ◽  
Vol 1 (2) ◽  
pp. 53
Author(s):  
Ferdyan Susetyo
Keyword(s):  
Gravity Model ◽  
Random Effect ◽  
Random Effect Model ◽  
Free Trade Area ◽  
Export Growth ◽  
Extensive Margin ◽  
Intensive Margin ◽  
Trade Facilitation ◽  
Trade Area ◽  
Port Efficiency

Trade facilitation is an effort of simplification and harmonization of international trade procedures. Trade facilitation that manifested in the form of policy packages that aim to reduce trade costs and improve export growth. Export growth can be sourced from the level of diversity of exported goods (extensive margin) and the volume of exported goods (intensive margin). This study aims to analyze the effect of trade facilitation on the extensive and intensive margin of trade eight member countries of ACFTA during the years 2006-2014. Trade facilitation indicators used in this study consisted of exporters and importers port efficiency. This study uses gravity model and estimation techniques Random Effect Model. The results showed that exporter port efficiency have a positive and significant effect on the extensive margin while importer port efficiency has a positive and significant effect on the intensive margin.

scholarly journals Identifying the determinants of South Africa’s extensive and intensive trade margins: A gravity model approach

2017 ◽  
Vol 20 (1) ◽  
Author(s):  
Marianne Matthee ◽  
Maria Santana-Gallego
Keyword(s):  
Gravity Model ◽  
Negative Impact ◽  
Positive Impact ◽  
Export Growth ◽  
Extensive Margin ◽  
Intensive Margin ◽  
Product Mix ◽  
Factors Affecting ◽  
Wide Range ◽  
Export Product

Background: The significance of the paper is twofold. Firstly, it adds to the small but growing body of literature focusing on the decomposition of South Africa’s export growth. Secondly, it identifies the determinants of the intensive and extensive margins of South Africa’s exports – a topic that (as far as the authors are concerned) has not been explored before.Aim: This paper aims to investigate a wide range of market access determinants that affect South Africa’s export growth along the intensive and extensive margins.Setting: Export diversification has been identified as one of the critical pillars of South Africa’s much-hoped-for economic revival. Although recent years have seen the country’s export product mix evolving, there is still insufficient diversification into new markets with high value-added products. This is putting a damper on export performance as a whole and, in turn, hindering South Africa’s economic growth.Methods: A Heckman selection gravity model is applied using highly disaggregated data. The first stage of the process revealed the factors affecting the probability of South Africa exporting to a particular destination (extensive margin). The second stage, which modelled trade flows, revealed the variables that affect export volumes (intensive margin).Results: The results showed that South Africa’s export product mix is relatively varied, but the number of export markets is limited. In terms of the extensive margin (or the probability of exporting), economic variables such as the importing country’s GDP and population have a positive impact on firms’ decision to export. Other factors affecting the extensive margin are distance to the market (negative impact), cultural or language fit (positive impact), presence of a South African embassy abroad (positive impact), existing free trade agreement with Southern African Development Community (positive impact) and trade regulations and costs (negative impact). In terms of the intensive margin (or the factors influencing the volume of exports), there are strong parallels with the extensive margin, with the exception being that the time involved in exporting has more of an impact than documentary requirements.Conclusion: Among the factors contributing to South Africa’s exports having largely developed in the intensive margin are a general lack of market-related information, infrastructural weaknesses (both of a physical and technological nature) and a difficult regulatory environment – all of which add to the cost and time involved in exporting. Policymakers have long spoken about the need for the country to diversify its export basket, but now talk about needs to give way to action. The government and its economic partners need to arrive at a common vision of an export sector that will be able to expand into new products and markets, be an active participant in global value chains and deliver sustainable jobs.

Trade Blocks and the Gravity Model: Evidence from Western Hemispheric Countries

2009 ◽  
Vol 10 (2) ◽  
pp. 136-156
Author(s):  
E.M. Ekanayake ◽  
Amit Mukherjee ◽  
Bala Veeramacheneni
Keyword(s):  
Gravity Model ◽  
Free Trade ◽  
Free Trade Area ◽  
Trade Flows ◽  
Western Hemisphere ◽  
Regional Trade ◽  
Trade Area ◽  
Model Evidence ◽  
Using Data ◽  
Trade Blocks

We analyze the major trade blocks in Western Hemisphere and their effects on intra-regional trade flows using data for the period 1980-2006. We use an augmented gravity model to estimate the effect of various trade blocks on trade flows within and across membership other Western Hemispheric countries. The findings of this study are consistent with findings of previous studies on Western Hemisphere trade flows and shed some light on whether the proposed Free Trade Area of the Americas is beneficial or not for Western Hemispheric countries.

L'impatto degli accordi Euro-mediterranei sull'ortofrutta italiana: alcuni risultati

2009 ◽  
pp. 105-121
Author(s):  
Alessandra Castellini ◽  
Cinzia Pisano
Keyword(s):  
Gravity Model ◽  
Free Trade Area ◽  
Gravity Equation ◽  
Fruit And Vegetables ◽  
Aggregate Level ◽  
Trade Area ◽  
Mediterranean Countries ◽  
Jel Code ◽  
The Impact ◽  
The Eu

- Sector: some Results Since 1995, the Barcelona Process aims to establish a free trade area between Mediterranean countries by 2010. The most commercialized products from Mediterranean countries are fruit and vegetables. The agreement defines, only for some products, preferences at the entrance of the eu market, limited concession for each partner for single products, limited quantities and calendars. This work tries to analyse the impact of the liberalization on the Italian products applying a gravity model in order to asses the Italian import flows from eight Mediterranean countries which signed the Barcelona agreement. The econometric estimation includes fruit and vegetables at the aggregate level and some specified products that enter in competition with typical Italian Mediterranean production such as citrus, melons, potatoes and tomatoes. Since these Mediterranean countries appear as a highly heterogeneous block related to historical, cultural, political and geographical factors, the gravity equation controls these factors by an augmented gravity equation.JEL Code: Q17 - Agriculture in International TradeParole chiave: accordi euro-mediterranei, mercato italiano, ortofrutta, competitivitŕ, gravity model

scholarly journals Determinant of Sesame Export Performance in Ethiopia: A Panel Gravity Model Application

2020 ◽  
Vol 8 (3) ◽  
pp. 714
Author(s):  
Murad Mohammed Baker ◽  
Beyan Ahmed Yuya
Keyword(s):  
Gross Domestic Product ◽  
Gravity Model ◽  
Unit Root ◽  
Export Performance ◽  
Random Effect ◽  
Random Effect Model ◽  
Domestic Product ◽  
Real Gross Domestic Product ◽  
Determinant Factors ◽  
The Government

Ethiopia’s sesame export earn percentage share in the total export had been rapid declining over the last decades while it was the second commodity in currency grossing of the country. The objective of this study was to examine the determinant factors of Ethiopia’s sesame exports performance, in the aspect of export trade, by the use of a more realistic model approach, a panel gravity model. It used short panel data that cover 11 countries of consistent Ethiopia’s sesame importers for the period of 13 years from 2002 to 2014. The panel unit root test of Levin-Lin-Chu was used for each variable and applied the first difference transformation for the variables that had a unit root. The random effect model results suggested that real gross domestic product of importing countries; Ethiopian real gross domestic product, real exchange rate and weighted distance were found to be the determinant factors of Ethiopia’s sesame exports performance. The estimated results revealed that as real gross domestic product of importing countries increase by 1%, the flows of Ethiopia’s sesame exports performance increase by 1.63%. Based on the finding results, the researcher recommends that the policy maker must adopt the policies that reduce the cost of shipping through improving the infrastructure for shipments sector and contract a free trade agreement with distant countries. The government should encourage the private sector to diversify their products and improving the quality of its products to increase the competitiveness the Ethiopian products in foreign markets.

scholarly journals ANALISIS PENERAPAN ASEAN-INDIA FREE TRADE AREA (AIFTA) TERHADAP PERDAGANGAN DUA NEGARA INDONESIA DENGAN INDIA MENGGUNAKAN GRAVITY MODEL

2018 ◽  
Vol 11 (2) ◽  
pp. 35-48
Author(s):  
Janes Guratan Djermor ◽  
Ivan Yulianto
Keyword(s):  
Gravity Model ◽  
Free Trade ◽  
Normal Level ◽  
Free Trade Area ◽  
Trade Agreement ◽  
Transportation Costs ◽  
Trade Relations ◽  
Trade Area ◽  
Using Data

The ASEAN-India Free Trade Area (AIFTA) policy has been effectively run since January 1, 2010. It is time to evaluate its benefits for trade relations between its members, especially between Indonesia and India. Analysis of the effectiveness and benefits of AIFTA policy in this study uses the Gravity Model by calculating the variables of Indonesia's GDP, India's GDP, transportation costs, and AIFTA's policies enggaged in trade relations between Indonesia and India using data from first quarter of 2004 until first quarter of 2018. This research shows that implementation of AIFTA does not have any effect on trade between two countries since trade between them had already reaching normal level. This research wishes to give a better insight on policy taking, especially for ongoing and forthcoming trade agreement.

scholarly journals Explaining Recent Romanian Migration: A Modified Gravity Model with Panel Data

2020 ◽  
Vol 9 (1) ◽  
pp. 46-64
Author(s):  
Mihaela Iordache ◽  
Mihaela Matei
Keyword(s):  
Panel Data ◽  
Gravity Model ◽  
Random Effect ◽  
Random Effect Model ◽  
Fixed Effect Model ◽  
Demographic Variables ◽  
The European Union ◽  
Temporal Perspective ◽  
Demographic Situation ◽  
Effect Model

AbstractThe present paper contributes to studies on Romanian emigration from a demographic, spatial, and temporal perspective. The purpose of this paper is to assess the selected economic and demographic variables’ impact on the volume of Romanian emigration to the European Union (EU) during 2010-2017. The analysis was done using a gravity model. The models used in this study are the fixed effect model (FEM) and the random effect model (REM), both applied to panel data. The results show that the economic and demographic factors have a significant influence on the emigration’s destination, and the socio-economic and demographic situation in the host country determines the flow migration from Romania. The paper strengthens the literature through an empirical analysis of the economic and demographic determinants of Romanian emigration to the EU from the perspective of the country of origin.

scholarly journals The Export Determinants of Indonesian Cut Flower in The International Market

Agro Ekonomi ◽  
2019 ◽  
Vol 30 (1) ◽  
Author(s):  
Niza Arumta ◽  
Jangkung Handoyo Mulyo ◽  
Irham Irham
Keyword(s):  
Gravity Model ◽  
Fixed Effects ◽  
Random Effect ◽  
Random Effect Model ◽  
International Market ◽  
Gdp Per Capita ◽  
Series Data ◽  
Cut Flower ◽  
Fixed Effects Model ◽  
Per Capita

Trade statistics of Indonesian cut flower indicates the potential of Indonesia as an exporting country. The international market becomes more attractive as the increasing trend of demand and the rising cost for producing cut flowers shows the various challenges for emerging countries. This study investigates whether the analytical gravity model fixed effect, common effect or random effect model is proper and what determinants have significant effects to the exports of Indonesian cut flower to partner countries. The data encompasses the period of 2008 to 2017 as the series data and the seven destination export countries from Indonesia as the cross-sectional data, using the panel regression with the basic gravity model. The estimation results show the fixed effects model is the proper model to explain the determinants of bilateral export on cut flower. The estimates imply the corroborate signs with GDP per capita of Indonesia, GDP per capita of partner countries and exchange rate while those variables with the opposite sign are distance and trade openness. Thus, the export promotion, quality improvement and technology development are required in the development of export of cut flower industries.

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