scholarly journals Searching for the Appropriate Measure of Multilateral Trade-Resistance Terms in the Gravity Model of Bilateral Trade Flows

2015 ◽  
Vol 14 ◽  
pp. 29 ◽  
Author(s):  
Natalia Drzewoszewska
Keyword(s):  
Gravity Model ◽  
Bilateral Trade ◽  
Trade Flows ◽  
Multilateral Trade ◽  
Bilateral Trade Flows

scholarly journals Trade and Infrastructure in the Belt and Road Initiative: A Gravity Analysis Based on Revealed Trade Preferences

2021 ◽  
Vol 14 (2) ◽  
pp. 52
Author(s):  
Cristina Di Stefano ◽  
P. Lelio Iapadre ◽  
Ilaria Salvati
Keyword(s):  
Gravity Model ◽  
Bilateral Trade ◽  
Trade Flows ◽  
Belt And Road Initiative ◽  
Total Trade ◽  
Multilateral Trade ◽  
Belt And Road ◽  
Trade Preferences ◽  
Entire Network ◽  
The Belt And Road

This paper aims at investigating whether and how the intensity of trade between a pair of countries changes when they experience improvements in their infrastructural systems. We carry out our analysis considering countries participating in the Belt and Road Initiative (BRI), a project specifically designed to promote infrastructural connectivity and therefore boost trade among the countries involved. Our empirical strategy relies on a particular specification of the gravity model, in which the dependent variable consists in an index of revealed trade preferences, calculated by comparing the actual value of trade flows between two countries with their expected value, proportional to the two countries’ total trade. Such methodology allows us to estimate bilateral trade intensity without resorting to the traditional “size” variables of the gravity model, taking the entire network of multilateral trade into account. We then study the possible impact of an improvement in infrastructure on a ‘gravity-adjusted’ measure of trade preferences, given by the residuals of our first estimations. Our results indicate that bilateral preferences among BRI countries will intensify inasmuch as they succeed in coordinating their infrastructural projects.

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 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 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 Ogranicenja gravitacionog modela u ekonometrijskoj analizi spoljnotrgovinske razmene

2005 ◽  
Vol 50 (166) ◽  
pp. 149-178
Author(s):  
Radmila Dragutinovic-Mitrovic
Keyword(s):  
Panel Data ◽  
Gravity Model ◽  
Bilateral Trade ◽  
Trade Flows ◽  
Section Data ◽  
Endogenous Regressors ◽  
Regression Parameters ◽  
Bilateral Trade Flows ◽  
Model Residuals ◽  
Trade Potentials

This work deals with econometric modeling of bilateral trade flows based on gravity model. Standard approach in most of previous empirical researches consisted of estimating bilateral trade potentials using gravity model and analysis of differences between the observed and predicted (potential) trade flows. Large differences were interpreted as the unexhausted foreign trade potentials. This work considers some limitations and problems of such approach mostly based on cross-section data. We consider alternative gravity model specifications with panel data and estimating procedures, as appropriate base for more precise estimates and conclusions. Furthermore, both theoretical and empirical analysis of econometric problems in panel data gravity model are carried out. Some of those problems have considered partially in previous empirical researches (for example autocorrelation in panels), but some of them have not considered at all, such as double endogenous regressors. Empirical results show that mentioned problems cause biased regression parameters estimates and consequently systematic variations of gravity model residuals (large systematic differences between observed and predicted). This makes conclusions on trade potentials between countries imprecise and unreliable.

scholarly journals Ogranicenja gravitacionog modela u ekonometrijskoj analizi spoljnotrgovinske razmene

2005 ◽  
Vol 50 (167) ◽  
pp. 77-106 ◽  
Author(s):  
Radmila Dragutinovic-Mitrovic
Keyword(s):  
Panel Data ◽  
Gravity Model ◽  
Bilateral Trade ◽  
Trade Flows ◽  
Section Data ◽  
Endogenous Regressors ◽  
Regression Parameters ◽  
Bilateral Trade Flows ◽  
Model Residuals ◽  
Trade Potentials

This work deals with econometric modeling of bilateral trade flows based on gravity model. Standard approach in most of previous empirical researches consisted of estimating bilateral trade potentials using gravity model and analysis of differences between the observed and predicted (potential) trade flows. Large differences were interpreted as the unexhausted foreign trade potentials. This work considers some limitations and problems of such approach mostly based on cross-section data. We consider alternative gravity model specifications with panel data and estimating procedures, as appropriate base for more precise estimates and conclusions. Furthermore, both theoretical and empirical analysis of econometric problems in panel data gravity model are carried out. Some of those problems have considered partially in previous empirical researches (for example autocorrelation in panels), but some of them have not considered at all, such as double endogenous regressors. Empirical results show that mentioned problems cause biased regression parameters estimates and consequently systematic variations of gravity model residuals (large systematic differences between observed and predicted). This makes conclusions on trade potentials between countries imprecise and unreliable.

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 Determinants of Bilateral Trade Flows Between Vietnam and Trading Partner Countries – Gravity Model Approach

2021 ◽  
Vol Volume II (December 2021) ◽  
pp. 128-142
Author(s):  
Le Khuong Ninh ◽  
Phan Anh Tu ◽  
Pham Thi Nhu Hao
Keyword(s):  
Gravity Model ◽  
Bilateral Trade ◽  
Trade Openness ◽  
Trade Agreement ◽  
Trade Flows ◽  
Population Exchange ◽  
Economic Distance ◽  
Trading Partners ◽  
Bilateral Trade Flows ◽  
Convergence Method

This study uses the gravity model to investigate the bilateral trade flows between Vietnam and 52 countries from 2001 through 2011. The data are collected from International Trade Centre (ITC), International Monetary Fund (IMF), and the World Bank (WB). The results show that economic size, geographical distance, economic distance, technological innovation, trade openness, free trade agreement, population, exchange rate, and common border affect the bilateral trade flows between Vietnam and these 52 countries. More importantly, this study uses the speed-of-convergence method to find new potential trading partners for Vietnam, such as those in Africa and Southwest Asia.

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