Determinants and barriers to bilateral trade A study on developing economies
Muhammad Subhani (),
Amber Osman and
Rabia Khokhar
MPRA Paper from University Library of Munich, Germany
Abstract:
World trade has grown rapidly. Several factors are highlighted by literature as a driving force behind the growth of world trade. Reduction in barriers to trade is one of them. A comprehensive empirical investigation is carried to ascertain the trade reducing and increasing effect of barriers to trade which are also known determinants of trade. The modified gravity model developed in this study analyses the effect of GDP, distance,remittances, FDI, transportation cost, exchange rate, inflation, population, import and export on trade flows. The study revealed that the population, import and transportation cost, distance, Tariff imposed by trading partner, FDI and Population of trading country are the determinants and significantly affect exports of developing economies. The study also ascertain that transportation cost, distance, population of trading partner, FDI of both trading countries and remittances of trading partner are the determinants that have major impact on import of developing nations.
Keywords: International Trade; Exports; Imports; Gravity Model; Trade barriers (search for similar items in EconPapers)
JEL-codes: A10 B22 F13 F23 M21 N7 O24 P33 R41 (search for similar items in EconPapers)
Date: 2010-10-09
New Economics Papers: this item is included in nep-cwa and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:26179
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