Gravity Equation for Different Product Groups: A study at product level

Thuy Nguyen () and Jean-Louis Arcand
Additional contact information
Thuy Nguyen: Graduate Institute of International and Development Studies, Geneva, Switzerland

No 18, Working Papers from Development and Policies Research Center (DEPOCEN), Vietnam

Abstract: Do homogeneous and heterogeneous goods response the same way to changes in income and different measures of distance? Running country-fixed-effect gravity equation for different product groups, I find that homogeneous goods are less responsive to changes in income than heterogeneous goods. I also find that export volume of all product types is significantly hindered by geographical distance between countries. However, exports of homogeneous goods are not affected by social distance measures such as common language and colonial relationship, while exports of heterogeneous goods significantly improve if trading parties speak the same official language and have colonial relationship. Fixed effect quantile estimation (Koenker 2004) with bootstrapped standard errors confirms the above finding for income and geographical distance. Regarding two social distance measures, common language and colonial relationship, median quantile (Tobit) estimation suggests that common language does not have impact on exports of any product type, while colonial relationship significantly influences export of heterogeneous goods. At higher levels of quantiles the impact of common language increases for all product types, and even strongest on exports of homogeneous goods. Colonial relationship loses its impact as being evaluated at 90th percentile.

Pages: 35 pages
Date: 2009-06
New Economics Papers: this item is included in nep-int
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://depocenwp.org/modules/download/index.php?id=70 (application/pdf)

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:dpc:wpaper:1809

Access Statistics for this paper

More papers in Working Papers from Development and Policies Research Center (DEPOCEN), Vietnam Contact information at EDIRC.
Bibliographic data for series maintained by Doan Quang Hung ().