A Gravity Model for Components of Imports

Yener Kandogan

Review of Applied Economics, 2009, vol. 05, issue 01-2, 17

Abstract: This paper develops a gravity model to explain different components of imports. It is shown that specific variables from competing trade theories affect each component differently: As economic sizes or relative factor endowments become similar, the volume of intra-industry imports, especially that of its horizontal component increases. Furthermore, the typical variables of an extended gravity model have different impact on each component: Colonial relations are important determinants of inter-industry imports whereas cultural proximity based on religion and language plays a more crucial role in determining intra-industry imports. Overall, the significance of these different effects suggests that the proposed decomposition of imports into its components removes a widespread but unnecessary restriction in the gravity models.

Keywords: International Development; International Relations/Trade; Marketing (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:reapec:143222

DOI: 10.22004/ag.econ.143222

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