EconPapers    
Economics at your fingertips  
 

The "distance-varying" gravity model in international economics: is the distance an obstacle to trade?

Vêlayoudom Marimoutou (), Denis Peguin () and Anne Peguin-Feissolle ()
Additional contact information
Vêlayoudom Marimoutou: GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales
Anne Peguin-Feissolle: GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales

Post-Print from HAL

Abstract: In this paper, we address the problem of the role of the distance between trading partners by assuming the variability of coefficients in a standard gravity model. The distance can be interpreted as an indicator of the cost of entry in a market (a fixed cost): the greater the distance, the higher the entry cost, and the more we need to have a large market to be able to cover a high cost of entry. To explore this idea, the paper uses a method called Flexible Least Squares. By allowing the parameters of the gravity model to vary over the observations, our main result is that the more the partner's GDP is large, the less the distance is an obstacle to trade.

Keywords: Gravity Equation; Flexible Least Squares; Geographical Distance (search for similar items in EconPapers)
Date: 2009-05-28
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00389570
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Published in Economics Bulletin, Economics Bulletin, 2009, 29 (2), pp. 1157-1173

Downloads: (external link)
https://hal.archives-ouvertes.fr/hal-00389570/document (application/pdf)

Related works:
Working Paper: The "distance-varying" gravity model in international economics: is the distance an obstacle to trade? (2010) Downloads
Journal Article: The "distance-varying" gravity model in international economics: is the distance an obstacle to trade? (2009) Downloads
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:hal:journl:hal-00389570

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2019-12-09
Handle: RePEc:hal:journl:hal-00389570