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The gravity approach for modeling international trade patterns for economies in transition

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  • Tiiu Paas

Abstract

The advantages of using the gravity approach for modeling transition processes in foreign trade are the ability of gravity models to explain international trade patterns under the conditions of comparatively little data and for validity of theoretical background of the model to the economies in transition. Both advantages are important when modeling transition processes. The results from using the gravity approach to explore the international trade patterns of Estonia as a country with a small, open, and comparatively successful transitional economy allow us to conclude that economies in transition should look for a regional niche to penetrate into the world market. Estonia has an excellent potential to develop trade relations within the Baltic Sea region (Baltic Rim) countries. Estonia's situation is certainly not unique, and conclusions presented in this paper could be applied to analyses of international trade patterns in other economies in transition. Copyright International Atlantic Economic Society 2000

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  • Tiiu Paas, 2000. "The gravity approach for modeling international trade patterns for economies in transition," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 6(4), pages 633-648, November.
    • Handle: RePEc:kap:iaecre:v:6:y:2000:i:4:p:633-648:10.1007/bf02295374
    DOI: 10.1007/BF02295374
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    1. Mikrajuddin Abdullah, 2023. "Theoretical foundation for the Pareto distribution of international trade strength and introduction of an equation for international trade forecasting," Papers 2309.00635, arXiv.org.
    2. Paas, Tiiu, 2002. "Gravity approach for exploring Baltic Sea regional integration in the field of international trade," HWWA Discussion Papers 180, Hamburg Institute of International Economics (HWWA).
    3. Marques, Helena, 2002. "Trade Similarities between Eastern and Southern Europe: Opportunities or Competition?," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 3(2), pages 1-20.
    4. Paas, Tiiu, 2002. "Gravity Approach for Exploring Baltic Sea Regional Integration in the Field of International Trade," Discussion Paper Series 26379, Hamburg Institute of International Economics.
    5. Helena Marques, 2010. "Migration Creation and Diversion in the European Union: Is Central and Eastern Europe a ‘Natural’ Member of the Single Market for Labour?," Journal of Common Market Studies, Wiley Blackwell, vol. 48(2), pages 265-291, March.
    6. Nazif Durmaz & John Kagochi, 2018. "Democracy and Inter-Regional Trade Enhancement in Sub-Saharan Africa: Gravity Model," Economies, MDPI, vol. 6(3), pages 1-17, August.
    7. Mikrajuddin Abdullah, 2023. "A New Approach to Overcoming Zero Trade in Gravity Models to Avoid Indefinite Values in Linear Logarithmic Equations and Parameter Verification Using Machine Learning," Papers 2308.06303, arXiv.org.
    8. Mohsen Mehrara & Samaneh Seijani & Abbas Rezazadeh Karsalari, 2017. "Determinants of high-tech export in developing countries based on Bayesian model averaging," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 35(1), pages 199-215.
    9. Helena Marques, 2008. "Trade And Factor Flows In A Diverse Eu: What Lessons For The Eastern Enlargement(S)?," Journal of Economic Surveys, Wiley Blackwell, vol. 22(2), pages 364-408, April.
    10. H. Richard Nakamura & Mikael Olsson & Mikael Lönnborg, 2012. "FDI in the post-EU accession Baltic Sea Region: A global or a regional concern?," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 12(2), pages 89-108, December.
    11. Andrea Furková, 2019. "Spatial spillovers and European Union regional innovation activities," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 27(3), pages 815-834, September.
    12. repec:bla:jcmkts:v:48:y:2010:i::p:265-291 is not listed on IDEAS
    13. Anna Golovko & Hasan Sahin, 2021. "Analysis of international trade integration of Eurasian countries: gravity model approach," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 11(3), pages 519-548, September.

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