Gravity Model: An Application to Trade between Iran and Regional Blocs

Amir Reza Soori and Ahmad Tashkini
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Amir Reza Soori: Ph.D. Student of Economics and Faculty Member of Institute for trade Studies and Research (ITSR)
Ahmad Tashkini: Ph.D. of Economics and Faculty member of Institute For trade Studies and Research (ITSR)

Iranian Economic Review (IER), 2012, vol. 17, issue 1, 1-12

Abstract: In this paper we revisited the recent contribution study which examines the determinants of bilateral trade between Iran and Europe Union, ECO, GCC and ASEAN countries in the period 1995-2009, using a panel data approach. The findings indicate that Iran’ trade flows follow the Linder hypothesis, while the bilateral trade is associated with Heckscher-Ohlin- Samuelson theorem. Results show that geographical distance is negative and significant; trade will increase if the transportation costs decreases. We also introduce the economic dimension and income percapita; these proxies confirm the positive effects on bilateral trade. Our results also confirm the hypothesis that foreign direct investment (FDI) is positively correlated with the trade.

Keywords: Bilateral Trade; Regional Blocs; Dynamic Panel Data; Foreign Direct Investment; Economic Dimension. (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eut:journl:v:17:y:2012:i:1:p:1

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