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A Gravity Model for Components of Imports

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  • Kandogan, Yener

Abstract

This paper develops a gravity model to explain different components of imports. It is shown that specific variables from competing trade theories affect each component differently: As economic sizes or relative factor endowments become similar, the volume of intra-industry imports, especially that of its horizontal component increases. Furthermore, the typical variables of an extended gravity model have different impact on each component: Colonial relations are important determinants of inter-industry imports whereas cultural proximity based on religion and language plays a more crucial role in determining intra-industry imports. Overall, the significance of these different effects suggests that the proposed decomposition of imports into its components removes a widespread but unnecessary restriction in the gravity models.

Suggested Citation

  • Kandogan, Yener, 2009. "A Gravity Model for Components of Imports," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 5(1-2), pages 1-17, April.
    • Handle: RePEc:ags:reapec:143222
    DOI: 10.22004/ag.econ.143222
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    References listed on IDEAS

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    Cited by:

    1. Jelena Trivic & £ukasz Klimczak, 2015. "The determinants of intra-regional trade in the Western Balkans," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 33(1), pages 37-66.

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