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Bilateral trade: a study on SAARC countries

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  • Subhani, Muhammad Imtiaz

Abstract

This research paper offers a selective survey of gravity equation in the International Trade. Gravity equation was first introduced in the Sixties as a purely empirical proposition to explain bilateral trade flow. The data was taken from the SAARC countries to evaluate the factors affecting the bilateral trade volume. The variables that impact on trade volume are studied in this thesis, as in : Transport Cost, Inflation, Exchange Rate, GDP, population, Tariff and distance by using multiple linear regressions. The results of transport cost, inflation, exchange rate, GDP and distance has the significant impact on the bilateral trade, whereas tariff and population have insignificant values.

Suggested Citation

  • Subhani, Muhammad Imtiaz, 2009. "Bilateral trade: a study on SAARC countries," MPRA Paper 36158, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:36158
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Bilateral Trade; SAARC countries;

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics

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