Intra-European Trade of Manufacturing Goods: An Extension of the Gravity Model
Mark Vancauteren () and
Daniel Weiserbs ()
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Mark Vancauteren: Universiteit Hasselt
International Econometric Review (IER), 2011, vol. 3, issue 1, 1-24
In this paper, we propose and test several extensions of the standard gravity model. This yields a specification that allows for (i) a more flexible income response; (ii) a competitiveness effect with a general and a specific component; and (iii) an alternative and consistent measure of remoteness. Those extensions were found to be significant factors to explain intra-EU trade. Next, we analyze the effect of EU harmonization of technical regulations on domestic and intra-EU trade. We find, at different levels of aggregation of the manufacturing sector, that harmonization of regulations has contributed to more intra-EU trade but, apparently, did not affect the so called border effect.
Keywords: Trade; EU Countries; Gravity Equation; Border Effects. (search for similar items in EconPapers)
JEL-codes: F11 F14 F15 (search for similar items in EconPapers)
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Working Paper: Intra-European Trade of Manufacturing Goods: An extension of the Gravity Model (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:erh:journl:v:3:y:2011:i:1:p:1-24
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