The gravity model analysis: an application on MERCOSUR trade flows

Eduardo Cuenca García, Margarita Navarro Pabsdorf and Estrella Gómez Herrera
Authors registered in the RePEc Author Service: Estrella Gomez-Herrera

Journal of Economic Policy Reform, 2013, vol. 16, issue 4, 336-348

Abstract: This paper explores the determinants of bilateral trade flows between Mercosur countries. To this aim, a gravity model is applied to annual bilateral exports between 75 countries in 1980–2008. The model is augmented with variables that are relevant in determining the volume and direction of international trade using two alternative estimation methods; pooled ordinary least squares and panel fixed effects. The results reveal that the influence of the agreement on trade has been positive but moderate. As a whole, Mercosur has had positive effects, and this agreement can be reinforced with the deepening of their relationships and the entry of new members.

Date: 2013
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Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:taf:jecprf:v:16:y:2013:i:4:p:336-348

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DOI: 10.1080/17487870.2013.846857

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