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Gravity Model by Panel Data Approach

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  • Sushil Kumar
  • Shahid Ahmed

Abstract

This article has examined the determinants of export and import flows of countries in the South Asia through estimations for a country panel data of eight countries during the period 1985–2011 using a gravity model. The estimated result suggests that gross domestic product (GDP) and population among other factors can explain export and import flows. Perhaps the most important finding of the study is that South Asia Free Trade Agreement (SAFTA) has produced trade creation among its members. Finally, the study found that geographic distance might be impeding trade, and tariff has negative effect on the trade. The study also found that the nature of trade is intra-industry among the member countries of South Asian Association for Regional Cooperation (SAARC).

Suggested Citation

  • Sushil Kumar & Shahid Ahmed, 2015. "Gravity Model by Panel Data Approach," Foreign Trade Review, , vol. 50(4), pages 233-249, November.
    • Handle: RePEc:sae:fortra:v:50:y:2015:i:4:p:233-249
    DOI: 10.1177/0015732515598587
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    References listed on IDEAS

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    Cited by:

    1. Sunder Ramaswamy & Abishek Choutagunta & Santhosh K. Sahu, 2016. "Evaluating Asian FTAs: What do Gravity Equation Models Tell Us?," Working Papers id:11377, eSocialSciences.
    2. Sakshi AGGARWAL, 2017. "Smile curve and its linkages with global value chains," Journal of Economics Bibliography, KSP Journals, vol. 4(3), pages 278-286, September.
    3. Javeria Maryam & Ashok Mittal, 2019. "An empirical analysis of India’s trade in goods with BRICS," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 66(4), pages 399-421, December.
    4. Aggarwal, Sakshi, 2017. "Sectoral Level Analysis of India’s Bilateral Trade over 2001-2015," MPRA Paper 80099, University Library of Munich, Germany.
    5. Hiroyuki Taguchi & Thet Mon Soe, 2021. "Myanmar’s Manufacturing Exports After the Lifting of Economic Sanctions," Foreign Trade Review, , vol. 56(2), pages 147-164, May.
    6. Sakshi Aggarwal & Debashis Chakraborty, 2022. "Which Factors Influence India’s Bilateral Intra-Industry Trade? Cross-Country Empirical Estimates," Working Papers 2260, Indian Institute of Foreign Trade.
    7. Aggarwal, Sakshi, 2023. "Intra-industry trade: Revisiting theory and Literature Survey," MPRA Paper 117182, University Library of Munich, Germany.
    8. Sakshi Aggarwal & Debashis Chakraborty, 2017. "Determinants of India’s Bilateral Intra-industry Trade over 2001–2015," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 18(2), pages 296-313, September.
    9. Aggarwal, Sakshi, 2023. "The empirical measurement and determinants of intra-industry trade for a developing country," MPRA Paper 117112, University Library of Munich, Germany.
    10. Robertson,Raymond, 2021. "Deep Integration in Trade Agreements : Labor Clauses, Tariffs, and Trade Flows," Policy Research Working Paper Series 9599, The World Bank.
    11. Shikha Gupta & Nand Kumar, 2021. "Three decades of narrow globalization: Evaluating India's exports between 1991 and 2017," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(2), pages 343-359, March.
    12. Sunder Ramaswamy & Abishek Choutagunta & Santosh Kumar Sahu, 2021. "Evaluating Asian Free Trade Agreements: What Does Gravity Model Tell Us?," Foreign Trade Review, , vol. 56(1), pages 60-70, February.

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    More about this item

    Keywords

    Gravity model; panel data; SAFTA; regional integration;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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