Does Relative Location Matter for Bilateral Trade Flows? An Extension of the Gravity Model

Beata K. Smarzynska ()
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Beata K. Smarzynska: The World Bank, Postal: The World Bank, 1818 H St, NW, MSN MC3-303, Washington, DC 20433, USA.
Authors registered in the RePEc Author Service: Beata Smarzynska Javorcik

Journal of Economic Integration, 2001, vol. 16, 379-398

Abstract:

This study extends the gravity model to include a new measure of the trading partners’ location relative to other countries. The proposed measure is close in spirit to the theory of gravity, since it is based on the concept of the world trade center. The measure is statistically significant when the gravity equation is estimated using the intra-OECD trade flows. The results indicate that two countries located at the periphery rely more on bilateral trade than their centrally located counterparts. The study shows that omitting the location measure influences the estimated effects of regional country groupings in a systematic manner.

Keywords: International Trade; Gravity Model; Regional Integration; Geography (search for similar items in EconPapers)
JEL-codes: F10 F15 (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0170

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