Portuguese Trade and European Union: The Gravity Model

Nuno Carlos Leitão and Sabyasachi Tripathi

MPRA Paper from University Library of Munich, Germany

Abstract: This research examines the determinants of bilateral trade between Portugal and European Union countries (EU-27) for the period 2000-2010, using a panel data. In this study we revisited the recent contribution as in Charoensukmongkol and Sexton (2011), Samy and Dehejia (2011), Serrano and Pinilla (2012), and Faustino and Proença (2011). The findings show that Portuguese trade flows are according the Linder hypothesis. The international trade is explained by Heckscher-Ohlin theorem. The empirical results demonstrate that geographical distance has a negative and significant effect on bilateral trade, i.e., there is a bilateral trade increase when trade partners are close. The economic dimension and common border are positively correlated with bilateral trade. Our results also support the hypothesis that physical capital endowment has a positive effect on bilateral trade.

Keywords: Gravity model; panel data; common border; geographical distance and factor endowment. (search for similar items in EconPapers)
JEL-codes: C20 C30 F12 (search for similar items in EconPapers)
Date: 2013-04
New Economics Papers: this item is included in nep-geo and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:45994

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