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Greece’s Potential Trade Flows: A Gravity Model Approach

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  • Christos Papazoglou

Abstract

This paper attempts to access whether Greece’s low openness is a reflection of its low trade integration primarily as a result of the country’s relatively poor goods export performance. The analysis estimates potential trade flows for Greece through a gravity model using a panel of cross-country data, which cover bilateral trade flows concerning the EU member states. These flows are then derived by applying the estimated parameters to the Greek economy. The results show that actual Greek exports fall short of potential ones, while the opposite is true with respect to imports. This becomes more profound when the extent of intra-industry trade is included in the analysis. The findings for the Greek exports differ considerably from the corresponding ones for Portugal, a country with similar characteristics, manifesting the limited convergence of Greece’s trade patterns towards the EU average as well as its unique geographical location relatively to the other EU countries. Copyright International Atlantic Economic Society 2007

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  • Christos Papazoglou, 2007. "Greece’s Potential Trade Flows: A Gravity Model Approach," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 13(4), pages 403-414, November.
    • Handle: RePEc:kap:iaecre:v:13:y:2007:i:4:p:403-414:10.1007/s11294-007-9107-x
    DOI: 10.1007/s11294-007-9107-x
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    Cited by:

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    More about this item

    Keywords

    Gravity model; Greek trade; Actual and potential trade patterns; F10; F14; F15;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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