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Is the Gravity Model applicable in Albania and the Mini Schengen Zone?

Author

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  • Anisa Sejdari

    (University of Siegen, Germany)

  • Iges Banda

    (Epoka University, Albania)

Abstract

The purpose of the study is to determine if the Gravity Model is applicable in the Albanian economy and conforms to the economic theory. This study offers a timeline of the historical changes that brought about the commerce liberalization and the integration of the country into organizations and trade agreements that have facilitated significant growth. This study employs an original panel data regression of the Gravity Model focusing on exports between Albania and its European reported trade countries during 2003-2019. The Model supports the theoretical framework and demonstrates how GDP and FTA’s positively impact export, while distance negatively impacts export. In addition, this study also discusses the Mini Schengen Zone. The Model also supports the economic theory, proving that GDP impacts positively the export flows and distance negatively. However, the impact of Free Trade Agreements (FTA) on export flows was not significant.

Suggested Citation

  • Anisa Sejdari & Iges Banda, 2022. "Is the Gravity Model applicable in Albania and the Mini Schengen Zone?," Journal of the Academy of Business and Emerging Markets, Academy of Business and Emerging Markets, vol. 2(2), pages 27-36.
    • Handle: RePEc:ris:jabema:021900
    DOI: 10.5281/zenodo.7089700
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