The Use of Gravity Models in the Identification of the Factors Determining Trade Flows in the European Union

Michał Bernard Pietrzak; Justyna Łapińska

doi:https://doi.org/10.59139/ps.2014.01.5

Michał Bernard Pietrzak Uniwersytet Mikołaja Kopernika w Toruniu , Justyna Łapińska Uniwersytet Mikołaja Kopernika w Toruniu Przegląd Statystyczny. Statistical Review, vol. 61, 2014, 1, pages: 65-78 Published online: 31 March 2014 DOI https://doi.org/10.59139/ps.2014.01.5

633 Views 33 Downloads

ARTICLE

(Polish) PDF

ABSTRACT

The article analyzes the impact of potential determinants on the level of trade volume between the member states of the European Union. As a result of the use of gravity model for panel data the identification of a significant impact of the size of the economies of the member states, their level of economic development, foreign direct investment, the level of the so-called trade freedom of countries and of significant differences in the level of economic development between trading partners on the level of their bilateral trade. Also, it confirmed the existence of a negative relationship between the geographical distance and the size of the countries and their mutual exchange and a significant increase in the level of exports, both from the EU-12 to EU-15, and vice versa.

KEYWORDS

international trade, the European Union, a gravity model

REFERENCES

Anderson J. E., (1979), A Theoretical Foundation for the Gravity Equation, American Economic Review, 69 (1), 106–116.

Amiti M., Greenaway D., Wakelin K., (2000), Foreign Direct Investment and Trade: Substitutes or Complements?, http://dev3.cepr.org/meets/wkcn/2/2290/papers/amiti.pdf.

Baldwin R. E., (1994), Towards an Integrated Europe, Centre for Economic Policy Research CEPR, London.

Bergstrand J. H., (1985), The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence, Review of Economics and Statistics, 67 (3), 474–481.

Carrere C., (2006), Revisiting the Effects of Regional Trade Agreements on Trade Flows with Proper Specifi cation of the Gravity Model, European Economic Review, 50 (2), 223–247.

Czarny E., Folfas P., (2011), Modele grawitacji jako narzędzie analityczne w ekonomii międzynarodowej, w: Zieliński Z. E. (red.), Rola informatyki w naukach ekonomicznych i społecznych. Innowacje i implikacje interdyscyplinarne, Wydawnictwo Wyższej Szkoły Handlowej, Kielce, t. 2, 146–156.

Drzewoszewska N., Pietrzak M. B., Wilk J., (2013), Grawitacyjny model przepływów handlowych między krajami Unii Europejskiej w dobie globalizacji, Roczniki Kolegium Analiz Ekonomicznych, 30,187–202.

Egger P., (2002), An Econometric View on the Estimation of Gravity Models and the Calculation of Trade Potentials, World Economy, 25 (2), 297–312.

Eichengreen B., Irwin D., (1998), The Role of History in Bilateral Flows, w: Frankel J. A. (red.), The Regionalization of the World Economy, University of Chicago Press.

Fukao K., Okubo T., Stern R. M., (2003), An Econometric Analysis of Trade Diversion under NAFTA, North American Journal of Economics and Finance, 14 (1), 3–24.

Ghosh, S., Yamarik, S., (2004), Are Preferential Trade Agreements Trade Creating? An Application of Extreme Bounds Analysis, Journal of International Economics, 63, 369–395.

Gómez-Herrera E., (2013), Comparing Alternative Methods to Estimate Gravity models of Bilateral Trade, Empirical Economics, 44 (3), 1087–1111.

Greenaway D., Milner C., (2002), Regionalism and Gravity, Scottish Journal of Political Economy, 49 (5), 574–585.

Head K., (2000), Gravity for Beginners, http://pacifi c.commerce.ubc.ca/keith/gravity.pdf.

Henderson D.J., Millimet D. L., (2008), Is Gravity Linear, Journal of Applied Econometrics, 23 (2), 137–172.

Kalirajan K., (1999), Stochastic Varying Coeffi cients Gravity Model: An Application in Trade Analysis, Journal of Applied Statistics, 26 (2), 185–193.

Kandogan Y., (2005), Evidence for the Natural Trade Partners Theory from the Euro-Mediterranean Region, Working Paper Series No. 2005-01, University of Michigan-Flint School of Management.

Linder S. B., (1961), An Essay on Trade and Transformation, John Wiley&Sons Ltd, Stockholm.

Linneman H., (1966), An Econometric Study of International Trade Flows, North-Holland, Amsterdam.

Nilsson L., (2000), Trade Integration and the EU Economic Membership Criteria, European Journal of Political Economy, 16, 807–827.

Ok S. T., (2010), What Determines Intra-EU Trade? The Gravity Model Revisited, International Research Journal of Finance and Economics, 39, 245–250.

Pietrzak M. B., (2010a), Dwuetapowa procedura budowy przestrzennej macierzy wag z uwzględnieniem odległości ekonomicznej, Oeconomia Copernicana, nr 1, 65–78.

Pietrzak M. B., (2010b), Wykorzystanie odległości ekonomicznej w przestrzennej analizie stopy bezrobocia dla Polski, Oeconomia Copernicana, nr 1, 79–98.

Pietrzak M. B., (2012), Wykorzystanie odległości ekonomicznej w przestrzennych analizach procesów ekonomicznych, w: Pawełek B., (red.), Modelowanie i prognozowanie zjawisk społeczno-gospodarczych. Aktualny stan i perspektywy rozwoju, Wyd. UE w Krakowie, Kraków, 96–106.

Rahman, M. M., (2009) Australia’s global trade potential: evidence from the gravity model analysis. w: 2009 Oxford Business and Economics Conference, 24–26.06.2009, Oxford.

Roberts B. A., (2004), A Gravity Study of the Proposed China-ASEAN Free Trade Area, The International Trade Journal, 18 (4), 335–353.

Serlenga L., Shin Y., (2004), Gravity Models of the Intra-EU Trade: Application of the Hausman-Taylor Estimation in Heterogeneous Panels with Common Time-specifi c Factors, http://www.dse.uniba.it/Convegni/incontro_cnr_2004/Serlenga_gravity.pdf.

Szczygielski K., Grabowski W., (2012), Are Unit Export Values Correct Measures of Quality, Economic Modeling, 28, 1189–1196.

Tinbergen J., (1962), Shaping the World Economy: Suggestions for an International Economic Policy, The Twentieth Century Fund, New York.

Tzouvelekas V., (2007), Accounting for Pairwise Heterogeneity in Bilateral Trade Flows: Stochastic Varying Coeffi cient Gravity Model, Applied Economics Letters, 14 (12), 927–930.