The Gravity Equation In International Trade
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The Gravity Model In International Trade
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Author : Peter A. G. van Bergeijk
language : en
Publisher: Cambridge University Press
Release Date : 2010-06-10
The Gravity Model In International Trade written by Peter A. G. van Bergeijk and has been published by Cambridge University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-06-10 with Business & Economics categories.
How do borders affect trade? Are cultural and institutional differences important for trade? Is environmental policy relevant to trade? How does one's income or wage relate to the fact that trade partners are nearby or far away? These are just some of the important questions that can be answered using the gravity model of international trade. This model predicts and explains bilateral trade flows in terms of the economic size and distance between trading partners (e.g. states, regions, countries, trading blocs). In recent years, there has been a surge of interest in this model and it is now one of the most widely applied tools in applied international economics. This book traces the history of the gravity model and takes stock of recent methodological and theoretical advances, including new approximations for multilateral trade resistance, insightful analyses of the measurement of economic distance and analyses of foreign direct investment.
The Gravity Equation In International Trade
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Author : Stephan Rudolph
language : en
Publisher: Sudwestdeutscher Verlag Fur Hochschulschriften AG
Release Date : 2011-09
The Gravity Equation In International Trade written by Stephan Rudolph and has been published by Sudwestdeutscher Verlag Fur Hochschulschriften AG this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-09 with categories.
The gravity equation is probably the most important tool in international economics to explain and estimate trade flows. However, since the gravity equation is important for political decisions, it is very important to achieve reliable results from its empirical application. One important discussion addresses the implausibly high measures for the impact of trade cost proxies on exports that frequently appear, especially in older works. The aim of the study is to contribute to the discussion about the suitability of the gravity equation's empirical applications. A new theory of endogenous trade costs is provided which shows that iceberg trade costs are likely to depend on exports. An interaction between exports and trade costs leads to a simultaneity problem. Moreover, this theory can be confirmed after estimating the gravity equation with an alternative econometric strategy: A simultaneous equation system using a theory-based index to compensate for the directly immeasurable trade costs. The result of the simultaneity approach and the use of constructed data for bilateral and multilateral trade costs is that the estimated direct effects of variables influencing exports decrease.
The Gravity Equation In International Trade
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Author : Thomas Chaney
language : en
Publisher:
Release Date : 2013
The Gravity Equation In International Trade written by Thomas Chaney and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with Economics categories.
The gravity equation in international trade is one of the most robust empirical finding in economics: bilateral trade between two countries is proportional to size, measured by GDP, and inversely proportional to the geographic distance between them. While the role of size is well understood, the role of distance remains a mystery. I propose the first explanation for the gravity equation in international trade, based on the emergence of a stable network of input-output linkages between firms. Over time, a firm acquires more suppliers and customers, which tend to be further away. I show that if, as observed empirically, (i) the distribution of firm sizes is well approximated by Zipf's law and (ii) larger firms export over longer distances on average, then aggregate trade is inversely proportional to distance. Data on firm level, sectoral, and aggregate trade support further predictions of the model.
The Gravity Equation In International Trade
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Author : Jeffrey Harold Bergstrand
language : en
Publisher:
Release Date : 1981
The Gravity Equation In International Trade written by Jeffrey Harold Bergstrand and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1981 with Commerce categories.
The Gravity Equation In International Trade
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Author : Michele U. Fratianni
language : en
Publisher:
Release Date : 2014
The Gravity Equation In International Trade written by Michele U. Fratianni and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
This chapter offers a selective survey of the gravity equation (GE) in international trade. This equation started in the Sixties as a purely empirical proposition to explain bilateral trade flows, without little or no theoretical underpinnings. At the end of the Seventies, the GE was "legitimized" by a series of theoretical articles that demonstrated that the basic GE form was consistent with various models of trade flows. Empirical applications of GE expanded to cover a variety of issues, such as the impact of regional trade agreements, national borders and currency unions on trade, as well as the use of the equation to sort out the relative merit of alternative trade theories. A new wave of studies is now concentrating on the general equilibrium properties of the GE and finer econometrics points. The renewed interest of the academic profession in the development of the GE is undoubtedly driven by the equation's empirical success.
Understanding Globalization Through The Lens Of Gravity
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Author : Jeffrey H. Bergstrand
language : en
Publisher: World Scientific Publishing Company
Release Date : 2019
Understanding Globalization Through The Lens Of Gravity written by Jeffrey H. Bergstrand and has been published by World Scientific Publishing Company this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with Free trade categories.
Since 1962, economists have used the "gravity equation" in international trade to explain empirically bilateral international trade flows, and have since more recently adopted the gravity model to explain foreign direct investment stocks. Motivated by its empirical success, Jeffrey H. Bergstrand provided one of the earliest formal theoretical foundations for the gravity equation in international trade in 1985. Since then, the gravity equation has become a fundamental element of international trade theory, empirical work, and policy analysis, especially of the effects of economic integration agreements and tariffs on trade flows and welfare. Understanding Globalization Through the Lens of Gravity is a curated collection of Bergstrand's published papers over the 30 years since his first paper on the theme of gravity. In four parts, the 17 papers span topics such as the determinants of international trade flows, economic determinants of free trade agreements, estimating the effects of economic integration agreements on trade flows, and economic determinants of multinational firms' foreign direct investment stocks, foreign affiliate sales and governments' bilateral investment treaties.
The Gravity Equation In International Trade
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Author : Michele Fratianni
language : en
Publisher:
Release Date : 2007
The Gravity Equation In International Trade written by Michele Fratianni and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with categories.
International Trade Efficiency The Gravity Equation And The Stochastic Frontier
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Author : Heejoon Kang
language : en
Publisher:
Release Date : 2014
International Trade Efficiency The Gravity Equation And The Stochastic Frontier written by Heejoon Kang and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
In the gravity equation of international trade, bilateral trade flows are regressed on trading partners' income and the distance that separates them along with other variables. This widely used equation is traditionally estimated by the ordinary least squares method. We employ an alternative technique of stochastic frontier estimation to assess the potential bilateral trade flows from the same gravity equation. Countries are shown to have low efficiencies in their international trade as the predicted trade from frontier estimation is generally far greater than actual trade. Trade efficiencies are computed and ranked for individual countries, ten geographical regions, and eleven regional trade agreements.
The Gravity Equation And The Interdependency Of Trade Costs And International Trade
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Author :
language : en
Publisher:
Release Date : 2011
The Gravity Equation And The Interdependency Of Trade Costs And International Trade written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with categories.
The gravity equation is probably the most important tool in international economics to explain and estimate trade flows. However, since the gravity equation is important for political decisions, it is very important to achieve reliable results from its empirical application. Thus, it is necessary to employ the gravity equation using a theoretically and empirically proper methodology. One important discussion addresses the implausibly high measures for the impact of trade cost proxies on exports that frequently appear, especially in older works. This problem became known as the "border puzzle" (Obstfeld and Rogoff, 2001). The aim of the study is to contribute to the discussion about the suitability of the gravity equation's empirical applications. The basic idea is that trade costs between two countries could additionally depend on the exports between these two countries and not only on the (more or less) exogenous proxy variables for trade costs, as they are normally used. In this study, a new theory of endogenous trade costs is provided which shows that iceberg trade costs are likely to depend on exports. An interaction between exports and trade costs (or the gravity function and a trade cost function) leads to a simultaneity problem. Moreover, this theory can be confirmed after estimating the gravity equation with an alternative econometric strategy: A simultaneous equation system using a theory-based index to compensate for the directly immeasurable trade. A further target of the study is in its use of the comprehensive trade cost index to compute "multilateral resistances" of countries to trade, introduced in the trend-setting work by Anderson and van Wincoop (2003). These multilateral resistances are necessary to retrieve unbiased results from empirical gravity equations. A methodology was developed to make the heretofore unknown index of multilateral resistances visible. The result of the simultaneity approach and the use of constructed data for bilateral and
The Econometrics Of Multi Dimensional Panels
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Author : Laszlo Matyas
language : en
Publisher: Springer
Release Date : 2017-07-26
The Econometrics Of Multi Dimensional Panels written by Laszlo Matyas and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-07-26 with Business & Economics categories.
This book presents the econometric foundations and applications of multi-dimensional panels, including modern methods of big data analysis. The last two decades or so, the use of panel data has become a standard in many areas of economic analysis. The available models formulations became more complex, the estimation and hypothesis testing methods more sophisticated. The interaction between economics and econometrics resulted in a huge publication output, deepening and widening immensely our knowledge and understanding in both. The traditional panel data, by nature, are two-dimensional. Lately, however, as part of the big data revolution, there has been a rapid emergence of three, four and even higher dimensional panel data sets. These have started to be used to study the flow of goods, capital, and services, but also some other economic phenomena that can be better understood in higher dimensions. Oddly, applications rushed ahead of theory in this field. This book is aimed at filling this widening gap. The first theoretical part of the volume is providing the econometric foundations to deal with these new high-dimensional panel data sets. It not only synthesizes our current knowledge, but mostly, presents new research results. The second empirical part of the book provides insight into the most relevant applications in this area. These chapters are a mixture of surveys and new results, always focusing on the econometric problems and feasible solutions.