scholarly journals The Gravity Model Specification for Modeling International Trade Flows and Free Trade Agreement Effects: A 10-Year Review of Empirical Studies~!2009-07-09~!2010-01-28~!2010-04-22~!

2010 ◽  
Vol 3 (1) ◽  
pp. 1-13 ◽  
Author(s):  
Konstantinos Kepaptsoglou ◽  
Matthew G. Karlaftis ◽  
Dimitrios Tsamboulas
Keyword(s):  
International Trade ◽  
Gravity Model ◽  
Free Trade ◽  
Free Trade Agreement ◽  
Empirical Studies ◽  
Trade Agreement ◽  
Trade Flows ◽  
Model Specification

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 Estimating the Impact of ASEAN China Free Trade Agreement on Indonesia’s Trade Balance

2019 ◽  
Vol 1 (1) ◽  
pp. 18-37
Author(s):  
Muhammad Arif Junaidi
Keyword(s):  
Gravity Model ◽  
Free Trade ◽  
Significant Role ◽  
Trade Balance ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
Trade Flows ◽  
Insignificant Effect ◽  
Asean Countries ◽  
The Impact

Using trade flows data of ASEAN countries and China from 2002 to 2017, this studyestimates the impact of ACFTA on ASEAN countries and China’s trade balance in general,and also for Indonesia’s trade balance in specific by elaborating the impact of ACFTA onthe trade flows both exports and imports. Using the gravity model and estimating by OLSand PPML, this paper finds that the impact of tariffs elimination due to the implementationof ACFTA increased exports and imports for ASEAN countries and China in general, andfor Indonesia in particular. However, the aggregate trade balances of ASEAN membercountries and China is zero since the impact of ACFTA on imports offset the impact ofACFTA on exports. Tariff’s elimination due to the implementation of ACFTA on Indonesiashows a negative and statistically insignificant effect on imports and exports. Thus, tariffshave not played significant role on increasing Indonesia’s exports and imports. As a result,the impact of ACFTA on Indonesia’s trade balance cannot be quantified clearly since theimpact of tariffs on exports and imports are not significant.

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.

How Free Trade Agreements Affect Exports and Imports in Vietnam

2017 ◽  
Vol 33 (5E) ◽  
Author(s):  
Nguyen Thi Hoang Oanh
Keyword(s):  
International Trade ◽  
Free Trade ◽  
World Economy ◽  
Free Trade Agreement ◽  
Free Trade Agreements ◽  
Trade Agreement ◽  
Trade Agreements ◽  
Trade Flows ◽  
Hub And Spoke ◽  
The Impact

The important year of 1995 marked Vietnam’s first integration as a member of ASEAN. By 2016, Vietnam had negotiated, signed, and implemented sixteen free trade agreements. They include both multilateral and bilateral free trade agreements such as the China-ASEAN, Vietnam-Chile, and Vietnam-Japan agreements. By signing free trade agreements Vietnam can increase trade flows in bilateral and multilateral developed-country FTA scenarios. Trade creation and diversion can be found in multilateral developing-country FTA scenarios and the author finds the impacts of each free trade agreement is different if analyzed for each 2-digit commodity. Keywords Free trade agreement, trade, import, export.t commodity References [1] Baier, S.L., Bergstrand, J.H., “Do free trade agreements actually increase members’ international trade?”, Journal of International Economics, 71 (2007), 72-95.[2] Chong, Soo Yuen & Hur, Jung, “Small Hubs, Large Spokes and Overlapping Free Trade Agreements”, The World Economy, 10.1111/j (2008), 1467-9701.[3] Hur, J., Alba, J. D., & Park, D., “Effects of hub-and-spoke free trade agreements on trade: A panel data analysis”, World Development, 38 (2010) 8, 1105-111.[4] McDonald, S. & Walmsley, Terrie, “Bilateral Free Trade Agreements and Customs Unions: The Impact of the EU Republic of South Africa Free Trade Agreement on Botswana”, The World Economy, 10.1111/j (2008),1467-9701.[5] Pan, S., Welch, M., Mohanty, S., Fadiga, M., & Ethridge, D., “Welfare analysis of the Dominican Republic-Central America-United States free trade agreement: The cotton textile and apparel industries”, The International Trade Journal, Vol. XXII (2008) 2, 1521-0545.[6] Benedictis, L., Santis, R., Vicarelli, C., “Hub-and-Spoke or else? Free trade agreements in the “enlarged” European Union”, The European Journal of Comparative Economics, 2 (2005) 2, 245-260.[7] Nguyen, Q.H., & Nguyen, T.H., “The impact of free trade agreement on trade flow of goods in Vietnam”, Vietnam Economist Annual Meeting, 2015[8] Das, R.U., Rishi, M., Dubey, J.D., “Asean plus six and successful FTAS: Can India propel intra-industry trade flows?”, The Journal of Developing Areas, 50 (2016) 2.[9] Hayakawa, K., “Impact of diagonal accumulation rule on FTA utilization: Evidence from bilateral and multilateral FTAs between Japan and Thailand”, J. Japanese Int. Economies, 32 (2014), 1-16.[10] Jennifer Y. Leung, “Bilateral vertical specialization between the U.S. and its trade partners - before and after the free trade agreements”, International Review of Economics and Finance, 45 (2016), 177-196.[11] Jongwanich, J., & Kohpaiboon, A., “Exporter responses to FTA tariff preferences: evidence from Thailand”, Asian Pacific Economic Literature (2017).[12] Lakatos, C., & Walmsley, T., “Investment creation and diversion effects of the ASEAN-China free trade agreement”, Economic Modelling, 29 (2012), 766-779.[13] Vanhnalat, B. at el., “Assessment the Effect of Free Trade Agreements on Exports of Lao PDR”, International Journal of Economics and Financial Issues, 5 (2015) 2, 365-376.[14] Vietnam Chamber of Commerce and Industry (VCCI), “Freedom of international trade in Vietnam”, Research report, Vietnam, 2015.

EU-UK FTA leaves open the prospect of future conflict

2020 ◽  
Keyword(s):  
Free Trade ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
Trade Flows ◽  
Member States ◽  
Content Type ◽  
The Eu

Significance The agreement offers zero quotas and tariffs on most goods, but there is little coverage on services while trade flows face disruption from significant non-tariff barriers. Impacts The deal will make it slightly easier to reach a UK-US free trade agreement, though strong divisions remain. The strict conditionality associated with the FTA suggests Euroscepticism will remain an important feature of UK politics. The process and costs associated with Brexit makes it less likely that Eurosceptic member states will attempt to leave the EU.

scholarly journals Free Trade Agreement between Turkey and Russian Federation and its Possible Effects to these Countries’ Trade and Taxational Reflections

2015 ◽  
Author(s):  
Raşit Gültekin ◽  
Mustafa Erkan Üyümez
Keyword(s):  
International Trade ◽  
Free Trade ◽  
Russian Federation ◽  
Regional Integration ◽  
Free Trade Agreement ◽  
Free Trade Agreements ◽  
Trade Agreement ◽  
Trade Agreements ◽  
Trade Restrictions ◽  
The Impact

The last period of international trade in goods covers a process carried out with globalization and regionalization efforts. Many countries, on the one hand, take part in arrangements that are executed under the leadership by global actors and aim at removing or reducing conventional obstacles to international trade, on the other hand, participate in various and regional economic integrations to provide a more deep and comprehensive economic cooperation and to cope with the competition and trade restrictions which continually increasing due to political, commercial and economical motives. Trade relations between Turkey and Russian Federation is an important element of the two countries' multidimensional cooperation. The most effective attempt to raise the top level of the volume and quality of existing commercial relationships will be the signing and putting into practice of a comprehensive free trade agreements between the two countries that have not been done previously. The purpose of this study is to determine the potential effects of such a free trade agreements between Turkey and Russian Federation in terms of trade in goods between two countries. To this end, in this study, theoretical aspects of free trade agreements' effects and place within regional integration types will be considered the impact of the possible Turkey-Russia free trade agreement will be examined in a framework of basic provisions with customs duties that set out in free trade agreements, recent trade data and key issues related to these countries.

scholarly journals The effect of ASEAN-korea free trade agreement (AKFTA) on Indonesia trade: a gravity model approach

2019 ◽  
Vol 17 (1) ◽  
pp. 1-7
Author(s):  
Arjun Saka Agung ◽  
Zulkarnain Ishak ◽  
Imam Asngari ◽  
Abdul Bashir
Keyword(s):  
Exchange Rate ◽  
Gravity Model ◽  
Free Trade ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
Gdp Per Capita ◽  
Positive Sign ◽  
Effect Model ◽  
Per Capita ◽  
Model Approach

The aim of this research is to analyze the effect of ASEAN Korea Free Trade Agreement (AKFTA) on Indonesia Trade with gravity model approach using panel data. This research is using Hausman and Chow test to choose the best between the Fixed Effect model (FEM) and Random Effect Model (REM). The test result shows that REM is the best model choosen to analyze the effect from GDP per capita, Exchange rate, distance and AKFTA Policy to the import from 14 AKFTA country economies to Indonesia. The result from R2 shows that the variation of independent variables (GDP per capita, Exchange rate, distance and AKFTA Policies) affected the variation of dependent variable (Import) as 54 percent. Meanwhile, from the gravity theory, the trade among AKFTA economies to Indonesia has bring positive impact as the distance has positive sign and lead to form trade creation. The variable of dummy policy has negative and significantly affected the import.

scholarly journals A Gravity Model of Trade for Nicaraguan Agricultural Exports

2018 ◽  
Vol 37 (74) ◽  
pp. 391-428
Author(s):  
Medardo Aguirre González ◽  
Claudio Candia Campano ◽  
Lilliam Antón López
Keyword(s):  
Gravity Model ◽  
Free Trade ◽  
Free Trade Agreement ◽  
Free Trade Agreements ◽  
Trade Agreement ◽  
Ordinary Least Squares ◽  
Agricultural Exports ◽  
Determining Factors ◽  
Trading Partners ◽  
Gravity Model Of Trade

This research aims to find the determining factors of Nicaraguan agricultural exports. To carry out this study, the author formulated a Gravity Model of Trade (GMT) and then made an estimation using a version of Ordinary Least Squares (OLS) that incorporates a consistent covariance matrix estimator to correct the heteroskedasticity and autocorrelation effects. The data considered observations over twenty years and for twelve countries: eight have signed a Free Trade Agreement (FTA) with Nicaragua and four have not. The variables that significantly increased the flow of Nicaraguan agricultural exports are the following: Nicaragua’s trading partners’ population, Nicaragua’s Gross Domestic Product per capita (GDP pc), the Real Exchange Rate (RER), and Nicaragua’s trading partners’ GDP pc; however, the distance variable turned out to be significantly trade-inhibiting. Free Trade Agreements (FTAs) predominantly have significant effects.

Impact of Globalization on International Trade between ASEAN-5 and China: Opportunities and Challenges

2004 ◽  
Vol 4 (1) ◽  
pp. 1850015 ◽  
Author(s):  
Yunhua Liu ◽  
Hang Luo
Keyword(s):  
International Trade ◽  
Exchange Rate ◽  
Free Trade ◽  
Market Share ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
Model Based ◽  
Share Model ◽  
Primary Goods ◽  
The Impact

This paper evaluates the impact of China's WTO entry and the establishment of a free-trade agreement between China and ASEAN on the ASEAN-5 (Indonesia, Malaysia, Philippines, Singapore and Thailand). We examine the trade competition between the two regions using a market-share model and assess the impact of China's WTO entry on the ASEAN-5 with an exchange rate-tariff model, based on two-digit SITC data. It is found that for the period 1987 to 2000 the competition in trade only occurred between China and Singapore in manufacturing goods, while the competition between China and other four nations was in primary goods. The trade-widening opportunity between the two regions appears much larger than the competitive challenges for ASEAN-5 after the WTO entry of China and the establishment of FTA between ASEAN and China, impacts on different industries are evaluated.

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