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CARICOM Bilateral Trade: A Preliminary Analysis Using the Gravity Model

Author

Listed:
  • Sandberg, H. Mikael
  • Taylor, Timothy G.
  • Seale, James L., Jr.

Abstract

This paper investigates the determinants of intra-CARICOM bilateral trade and the CARICOM member's trade with the North American and European countries using the gravity model. Seventeen annual cross-sections are estimated for the period 1980 through 1996. Overall, the empirical results indicate that the gravity model has considerable potential to explain intra-CARICOM bilateral trade as well as trade between CARICOM members and non-members. The evidence suggests that both the importer's GDP per capita and the exporter's GDP per capita exert strong positive effects on CARICOM trade levels. Since these effects are found to be statistically the same, we conclude that the gravity model is symmetric with respect to GDP per capita. Further, sharing a common language, colonial ties, or membership in the CARICOM all significantly contribute to larger volumes of bilateral trade, while geographic distance has the opposite effect. Both the exporting and the importing countries' populations have a positive effect on trade levels, indicating that larger economies have a wider production base and thus export and import more than would smaller economies.

Suggested Citation

  • Sandberg, H. Mikael & Taylor, Timothy G. & Seale, James L., Jr., 2002. "CARICOM Bilateral Trade: A Preliminary Analysis Using the Gravity Model," Technical Papers 15636, University of Florida, International Agricultural Trade and Policy Center.
  • Handle: RePEc:ags:uflotp:15636
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    File URL: http://purl.umn.edu/15636
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    References listed on IDEAS

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    Cited by:

    1. Hippolyte, Rommell, 2012. "Determinants of Barbados Exports: Preliminary Analysis using a Gravity Model Approach," MPRA Paper 75321, University Library of Munich, Germany, revised Jun 2015.

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