A Gravity Model Analysis of the Benefits of Economic Integration in the Pacific Rim

David Karemera () and Wilbur I. Smith
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David Karemera: South Carolina State University, Postal: Department of Economics, South Carolina State University,, Orangeburg, SC 29117, U.S.A
Wilbur I. Smith: Florida A&M University, Postal: Florida A&M University

Journal of Economic Integration, 1999, vol. 14, 347-367

Abstract:

A modified gravity model of international trade is used to evaluate determi - nants of flows of commodities most often traded in the Pacific Rim. It is shown that the gravity model can be reparameterized effectively by using time series and cross section data rather than using cross section data alone. Documented evidence indicates that all independent variables including income, export and import unit values, exchange rates, and membership in regional trade groups are major determinants of trade flows in the Pacific Rim. Specifically, member - ship in the ASEAN significantly increased trade creation among members as well as fostered trade diversion from members to nonmembers. However, the impact of membership in the NAFTA on trade flows in the Pacific Rim is limit - ed and appears to be commodity specific.

Keywords: pacific rim; economic integration; generalized gravity model; ASEAN; NAFTA (search for similar items in EconPapers)
JEL-codes: F02 F14 F15 (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0108

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