A revisited gravity equation in trade flow analysis: an application to the case of Tunisian olive oil exports
AbstractThis study revisits the utility of gravity models in the analysis of the principal determinants of exports. Traditional cross-sectional models are improved by considering the effect of omitted variables and/or the dynamic of trade flows through the use of spatial econometric techniques and panel data specification. This proposal is applied to the Tunisian olive oil exports during the period 2001-2009. The results provide evidence of the inertia found in export volumes, with trade relations anchored in the past likely to continue in the future. Also, we obtain evidence on the existence of a clear similarity in flows between neighbouring importing countries. On the other hand, the results show a positive, significant relationship between the importing country’s income level and imported olive oil volume. The effect of importers’ human development index is positive. The distance between countries has a negative impact on trade flow. On the contrary, sharing a common language increases olive oil trade flows. Finally, trade figures and results reflect a strong dependence of Tunisian olive oil production on precipitations
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Bibliographic InfoArticle provided by Asociación Española de Ciencia Regional in its journal Investigaciones Regionales.
Volume (Year): (2011)
Issue (Month): 21 ()
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Gravity model; spatial econometrics; panel data; tunisian olive oil exports;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- F10 - International Economics - - Trade - - - General
- R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
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