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The Gravity Equation: To Pool or Not to Pool-A Critical Assessment

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  • Ghaddab Kamel

    (High Institute of Management, Sousse University)

Abstract

This paper develops an empirical framework to analyze the relationship between geographical factors and economic integration. Critiquing traditional gravity models of bilateral trade for their empirical rather than theoretical foundations, we propose a new quantitative approach to enhance the accuracy of integration measurements. Addressing key theoretical and econometric challenges, we advocate for the use of hierarchical linear mixed models, which capture nuanced variations in international trade flows often overlooked by traditional methods. This approach integrates spatial and economic factors more effectively, offering a robust alternative for empirical trade analysis. Our findings contribute to the methodology of trade studies, providing improved tools for understanding the dynamics of economic integration.

Suggested Citation

  • Ghaddab Kamel, 2026. "The Gravity Equation: To Pool or Not to Pool-A Critical Assessment," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 41(2), pages 187-234, June.
    • Handle: RePEc:ris:integr:022613
    DOI: 10.11130/jei.2025016
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