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A revisited gravity equation in trade flow analysis: an application to the case of Tunisian olive oil exports

  • Angulo, A. M.

    (Universidad de Zaragoza)

  • Mtimet, N.

    (Ecole Superieure Agriculture de Mograne)

  • Dhehibi, B.

    (International Center for Agricultural Research in the Dry Areas (ICARDA))

  • Atwi, M.

    (Universidad de Zaragoza)

  • Ben Youssef , O.

    (Centro de Exportaciones de Túnez - CEPEX.)

  • Gil, J. M.

    (CREDA-UPC-IRTA)

  • Sai, M. B.

    (Instituto del Olivar de Túnez)

This 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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Article provided by Asociación Española de Ciencia Regional in its journal Investigaciones Regionales.

Volume (Year): (2011)
Issue (Month): 21 ()
Pages: 225-239

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Handle: RePEc:ris:invreg:0039
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  1. Andrew K. Rose, 2002. "Do We Really Know that the WTO Increases Trade?," NBER Working Papers 9273, National Bureau of Economic Research, Inc.
  2. Ming-Long Lee & R. Kelley Pace, 2005. "Spatial Distribution of Retail Sales," The Journal of Real Estate Finance and Economics, Springer, vol. 31(1), pages 53-69, August.
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  4. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," NBER Working Papers 10480, National Bureau of Economic Research, Inc.
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  10. Breusch, T.S. & Pagan, A.R., . "The Lagrange multiplier test and its applications to model specification in econometrics," CORE Discussion Papers RP -412, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  11. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
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