Determinants of the Trade Balance in Industrialized Countries

Martin Falk

in WIFO Studies from WIFO

Abstract: This paper investigates the determinants of the trade balance using panel data for 32 industrialised and emerging economies for the period 1990–2007. The results, based on fixed effects models and linear mixed models allowing for random slope coefficients, show that the trade balance as a percentage of GDP is significantly positively related to real foreign GDP per capita of the trading partners. Real domestic GDP per capita has a negative effect on the trade balance. A real depreciation of the real effective exchange rate leads to an improvement of the trade balance. However, in countries with a negative trade balance and/or a large positive net foreign direct investment position the trade balance is much less sensitive to movements in the real effective exchange rate.

Keywords: FIW; Trade; Balance (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
https://www.wifo.ac.at/wwa/pubid/34230 abstract (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wfo:wstudy:34230

Access Statistics for this book

More books in WIFO Studies from WIFO Contact information at EDIRC.
Bibliographic data for series maintained by Florian Mayr ().