New Findings on Actual and Potential Trade between Romania and the Russian Federation: A Gravity Approach
The paper attempts to verify the hypothesis that Romanian exports to the Russian Federation are below their potential. We first looked at statistical data regarding bilateral trade, custom duties and foreign direct investment; the resulting conclusions support our hypothesis. Further, we use a gravity equation, in order to forecast Romanian exports to a number of 43 countries, accounting for a sizeable share of total exports, covering a world-wide area using data series over a period of time between 1993 and 2008. Based on the gravity equation, we calculated export potential of Romania to the Russian Federation, being interested in the long run trade dynamics potential. We made the comparison between potential and real trade for the year 2008, being in fact interested in what export would have been in 2008 if during all the period studied (1993-2007) trade would have followed the gravity patterns. We conclude that if the Romanian exports to the Russian Federation would have perfectly fitted the general “gravity pattern”, the level of exports to the country would stand at 2,317 current billion dollars, which is 2.58 times higher than the registered level. From an economic point of view, these results can be interpreted, in the context of our broader analysis, as a good indicator that the opportunities in the Russian Federation market are still undervaluated by Romanian exporters and the rest of stakeholders in the exportation process.
Volume (Year): (2010)
Issue (Month): 4 (December)
|Contact details of provider:|| Postal: |
Phone: 004 021 3188148
Fax: 004 021 3188148
Web page: http://www.ipe.ro/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Juan Ruiz & Josep M. Vilarrubia, 2007. "The wise use of dummies in gravity models: export potentials in the Euromed region," Banco de Espa�a Working Papers 0720, Banco de Espa�a.
- Vladimir Kontorovich, 2005. "Russia in the 21st Century: The Prodigal Superpower," Comparative Economic Studies, Palgrave Macmillan, vol. 47(4), pages 707-709, December.
- Edward Christie, 2001.
"Potential Trade in Southeast Europe: A Gravity Model Approach,"
wiiw Balkan Observatory Working Papers
11, The Vienna Institute for International Economic Studies, wiiw.
- Edward Christie, 2002. "Potential Trade in Southeast Europe: a Gravity Model Approach," wiiw Working Papers 21, The Vienna Institute for International Economic Studies, wiiw.
- Gros, Daniel & Gonciarz, Andrzej, 1996. "A note on the trade potential of Central and Eastern Europe," European Journal of Political Economy, Elsevier, vol. 12(4), pages 709-721, December.
When requesting a correction, please mention this item's handle: RePEc:rjr:romjef:v::y:2010:i:4:p:102-124. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Corina Saman)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.