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Does every stone fall in the same way? new gravity evidence on world trade

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  • Cunedioglu, Ekrem
  • Yucel, Eray

Abstract

In this paper, we examine a series of questions about bilateral trade flows in the light of a rich and up-to-date panel data set. The analyses performed reveal that (1) globalization process has been functioning in a number of ways, (2) functioning of economic regions display alternative results based on model specification, (3) distance is an important factor in the functioning of economic regions, (4) trade relationships do strengthen when countries move toward stronger degrees of their regimes, regardless of democratic or autocratic, (5) the same polity direction implies a higher degree of trade between countries, (6) given the joint regime strength (common direction of regimes) of trade partners, common direction of regimes (higher joint regime strength) implies lower trade, (7) partners belonging to the same religion trade less, (8) partners with the same language trade more among themselves, (9) given that partners are of the same religion (language), same language (religion) implies lower trade.

Suggested Citation

  • Cunedioglu, Ekrem & Yucel, Eray, 2011. "Does every stone fall in the same way? new gravity evidence on world trade," MPRA Paper 30870, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:30870
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    File URL: https://mpra.ub.uni-muenchen.de/30870/1/MPRA_paper_30870.pdf
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    References listed on IDEAS

    as
    1. Leamer, Edward E. & Levinsohn, James, 1995. "International trade theory: The evidence," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 26, pages 1339-1394, Elsevier.
    2. Toke S. Aidt & Martin Gassebner, 2010. "Do Autocratic States Trade Less?," The World Bank Economic Review, World Bank, vol. 24(1), pages 38-76, January.
    3. Sübidey Togan, 2004. "Turkey: Toward EU Accession," The World Economy, Wiley Blackwell, vol. 27(7), pages 1013-1045, July.
    4. Jeffrey A. Frankel, 1997. "Regional Trading Blocs in the World Economic System," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 72, January.
    5. Richard Baldwin & Daria Taglioni, 2006. "Gravity for Dummies and Dummies for Gravity Equations," NBER Working Papers 12516, National Bureau of Economic Research, Inc.
    6. Cunedioglu, Ekrem & Yucel, Eray, 2010. "Does Mediterranean define an economic region?," MPRA Paper 27937, University Library of Munich, Germany.
    7. Bernard M. Hoekman & Togan Sübidey, 2005. "Turkey : Economic Reform and Accession to the European Union," World Bank Publications - Books, The World Bank Group, number 7494.
    8. Jeffrey Frankel & Andrew Rose, 2002. "An Estimate of the Effect of Common Currencies on Trade and Income," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(2), pages 437-466.
    9. Yu, Miaojie, 2010. "Trade, democracy, and the gravity equation," Journal of Development Economics, Elsevier, vol. 91(2), pages 289-300, March.
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    Cited by:

    1. Camlica, Ferhat & Orman, Cuneyt & Payzanoglu, Durukan & Yucel, Eray, 2012. "Southeastern Europe: post-crisis prospects and risks," MPRA Paper 45539, University Library of Munich, Germany.

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    More about this item

    Keywords

    International trade; Gravity; Globalization; Economic regions; Institutions; Cultures;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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