Bilateral trade: a study on SAARC countries

Muhammad Subhani (drsubhani73@gmail.com)

MPRA Paper from University Library of Munich, Germany

Abstract: This research paper offers a selective survey of gravity equation in the International Trade. Gravity equation was first introduced in the Sixties as a purely empirical proposition to explain bilateral trade flow. The data was taken from the SAARC countries to evaluate the factors affecting the bilateral trade volume. The variables that impact on trade volume are studied in this thesis, as in : Transport Cost, Inflation, Exchange Rate, GDP, population, Tariff and distance by using multiple linear regressions. The results of transport cost, inflation, exchange rate, GDP and distance has the significant impact on the bilateral trade, whereas tariff and population have insignificant values.

Keywords: Bilateral Trade; SAARC countries (search for similar items in EconPapers)
JEL-codes: A1 (search for similar items in EconPapers)
Date: 2009
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Published in South Asian Journal of Management Sciences 2.3(2009): pp. 15-21

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