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Gravity Modeling: International Trade And R&D

Author

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  • Josheski, Dushko
  • Fotov, Risto

Abstract

In this paper issue of gravity modeling in international trade has been investigated. Standard gravity equation augmented with other variables to control for transportation cost, whether trade partners are neighbors and whether country is landlocked, or countries participants in trade have had colonial history together. Also in our model we control whether traded commodities are homogenous, differentiated or high tech, as well referenced. Variable to denote technology are: TAI index, which stands for technological achievement index, also variables for creation and diffusion of technology, as measured by the number of patents from the residents and royalty and license fees receipts, by the foreign citizens. Results are as expected and the show that trade is highly dependent on the exporters and importers levels of technology.

Suggested Citation

  • Josheski, Dushko & Fotov, Risto, 2013. "Gravity Modeling: International Trade And R&D," MPRA Paper 45550, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:45550
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    File URL: https://mpra.ub.uni-muenchen.de/45550/1/MPRA_paper_45550.pdf
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    References listed on IDEAS

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    1. Enrico Spolaore & Alberto Alesina & Romain Wacziarg, 2000. "Economic Integration and Political Disintegration," American Economic Review, American Economic Association, vol. 90(5), pages 1276-1296, December.
    2. Coe, David T. & Helpman, Elhanan, 1995. "International R&D spillovers," European Economic Review, Elsevier, vol. 39(5), pages 859-887, May.
    3. Thursby, Jerry G & Thursby, Marie C, 1987. "Bilateral Trade Flows, the Linder Hypothesis, and Exchange Risk," The Review of Economics and Statistics, MIT Press, vol. 69(3), pages 488-495, August.
    4. Jacob A. Bikker, 1987. "An International Trade Flow Model with Substitution: An Extension of the Gravity Model," Kyklos, Wiley Blackwell, vol. 40(3), pages 315-337, August.
    5. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-116, March.
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    Cited by:

    1. Cuauhtémoc Calderón Villarreal & Sarahí Sánchez León & Leticia Hernández Bielma, 2018. "The commercial opening and its impact on income in North America: Benefit or regression?," Contaduría y Administración, Accounting and Management, vol. 63(4), pages 23-24, Octubre-D.
    2. Cuauhtémoc Calderón Villarreal & Sarahí Sánchez León & Leticia Hernández Bielma, 2018. "La apertura comercial y su impacto en el ingreso en Norteamérica: ¿beneficio o retroceso?," Contaduría y Administración, Accounting and Management, vol. 63(4), pages 21-22, Octubre-D.

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    More about this item

    Keywords

    Key words: bilateral trade; gravity model; R&D; OLS; PPML;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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