Trade Flows and Spatial Effects: The Gravity Model Revisited

A. Porojan

Discussion Papers from University of Exeter, Department of Economics

Abstract: The paper revisits the popular gravity model of trade in the light of the increasingly acknowledged findings of spatial econometrics and interprets the results in view of some recent theoretical developments from the economic literature that contribute to its foundation. When the inherent spatial effects are explicitly taken into account, the magnitude of the estimated parameters changes considerably and, with it, the measures on the predicted trade flows. This result is illustrated on the case of predicted trade flows between the EU and some of its potential members.

Keywords: TRADE; ECONOMETRICS; SPATIAL ANALYSIS (search for similar items in EconPapers)
JEL-codes: F17 R15 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2000
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:exe:wpaper:0004

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