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Modelling changes of foreign trade relations in the context of European Union expansion

Author

Listed:
  • Poliakova Olha Yu.

    () (Research Centre of Industrial Problems of Development of NAS of Ukraine)

  • Shlykova Viktoriia O.

    () (Research Centre of Industrial Problems of Development of NAS of Ukraine)

Abstract

The article analyses experience of foreign and domestic researchers on the use of gravity models for detecting factors of influence upon the foreign trade relations between countries. Using the EU example the authors tested the assumption that redistribution of influences of indicators upon volumes of international trade takes place along with expansion of integration associations. The article builds ten modifications of the gravity model for various groups of EU countries on the basis of data for 2003 and 2012 years with introduction of additional explanatory variables, including the fictitious ones. Volume of export of goods is selected as a dependent variable. The article identifies that the most stable in time factor of influence upon the volume of trade between countries is the sizes of their population, significance of GDP volumes and distances between partners reduces and belonging to "old" countries members of EU becomes an insignificant factor. The article proves that it is necessary to use additional variables in accordance with specific features of interrelations between countries at each stage of integration association functioning.

Suggested Citation

  • Poliakova Olha Yu. & Shlykova Viktoriia O., 2014. "Modelling changes of foreign trade relations in the context of European Union expansion," The Problems of Economy, RESEARCH CENTRE FOR INDUSTRIAL DEVELOPMENT PROBLEMS of NAS (KHARKIV, UKRAINE), issue 1, pages 330-336.
  • Handle: RePEc:idp:redpoe:y:2014:i:1:p:330_336
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    References listed on IDEAS

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    1. Andrey Kaukin & Georgy Idrisov, 2014. "The Gravity Model Of Russia’S International Trade: The Case Of A Large Country With A Long Border," Working Papers 0088, Gaidar Institute for Economic Policy, revised 2014.
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