Extended Gravity Panel Data Model of Polish Foreign Trade
The goal of this article is to investigate the determinants of the pattern of bilateral trade flows of Poland with its major trade partners with the use of trade gravity model approach. The analysis is carried out for 181 trade partners of Poland in the period 1999-2006. In the basic version of the trade gravity model we take into account only the standard factors as suggested by the literature of the subject. In its extended version we control for several additional factors including: quality of institutions, impact of regional and bilateral trade agreements or exchange rate volatility. In order to obtain unbiased results we utilize the Prais-Winsten regression with Panel Corrected Standard Errors (PCSE). In most of the cases the coefficients for the traditional gravity determinants are economically sensible and their impact on the dependant variable is statistically significant. The impact of market size, distance or quality of institutions are in line with our expectations. The role of migrants as proxied by the size of Polish diaspora is rather large. Increase in the size of Polish diaspora of 1 per cent increases bilateral trade by approx. 0.2 per cent. Foreign exchange rate volatility has an adversely negative impact on the trade flows. The unrealized potential of a membership in the eurozone could be judged relatively high. The results concerning trade agreements are however rather unanticipated.
|Date of creation:||Jan 2009|
|Contact details of provider:|| Postal: Univeristy of Gdansk, Faculty of Economics, ul. Armii Krajowej 119/121, 81-824 Sopot, Poland|
Phone: (048) 58 523-13-70
Fax: (048) 58 523-13-70
Web page: http://ekonom.ug.edu.pl/web/keie/index.html?lang=pl
More information through EDIRC
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.:
- Peter Egger, 2005. "Alternative Techniques for Estimation of Cross-Section Gravity Models," Review of International Economics, Wiley Blackwell, vol. 13(5), pages 881-891, November.
- Andrew K. Rose, 2001. "Currency unions and trade: the effect is large," Economic Policy, CEPR;CES;MSH, vol. 16(33), pages 449-461, October.
- Henri L. F. de Groot & Gert-Jan Linders & Piet Rietveld & Uma Subramanian, 2004.
"The Institutional Determinants of Bilateral Trade Patterns,"
Wiley Blackwell, vol. 57(1), pages 103-123, 02.
- Henri L.F. de Groot & Gert-Jan Linders & Piet Rietveld & Uma Subramanian, 2003. "The Institutional Determinants of Bilateral Trade Patterns," Tinbergen Institute Discussion Papers 03-044/3, Tinbergen Institute, revised 30 Oct 2003.
- Henri L.F. De Groot & Gert-Jan Linders & Piet Rietveld & Uma Subramanian, 2003. "The Institutional Determinants of Bilateral Trade Patterns," ERSA conference papers ersa03p421, European Regional Science Association.
- Andrew K. Rose, 1999. "One Money, One Market: Estimating the Effect of Common Currencies on Trade," NBER Working Papers 7432, National Bureau of Economic Research, Inc.
- Rose, Andrew K, 1999. "One Money, One Market: Estimating the Effect of Common Currencies on Trade," CEPR Discussion Papers 2329, C.E.P.R. Discussion Papers.
- Rose, Andrew, 1999. "One Money, One Market: Estimating the Effect of Common Currencies on Trade," Seminar Papers 678, Stockholm University, Institute for International Economic Studies.
- Helena Marques, 2008. "Asymmetries in Heterogeneous Integrated Areas: Evidence from Intra-EU Sectoral Trade," Working Papers 2008.2, International Network for Economic Research - INFER.
- Laszlo Matyas, 1997. "Proper Econometric Specification of the Gravity Model," The World Economy, Wiley Blackwell, vol. 20(3), pages 363-368, 05.
- Aitken, Norman D, 1973. "The Effect of the EEC and EFTA on European Trade: A Temporal Cross-Section Analysis," American Economic Review, American Economic Association, vol. 63(5), pages 881-892, December.
- Peter Egger & Michael Pfaffermayr, 2003. "The proper panel econometric specification of the gravity equation: A three-way model with bilateral interaction effects," Empirical Economics, Springer, vol. 28(3), pages 571-580, July.
- Jeffrey Frankel & Andrew Rose, 2002. "An Estimate of the Effect of Common Currencies on Trade and Income," The Quarterly Journal of Economics, Oxford University Press, vol. 117(2), pages 437-466.
- Frankel, Jeffrey & Rose, Andrew K., 2001. "An Estimate of the Effect of Common Currencies on Trade and Income," Working Paper Series rwp01-013, Harvard University, John F. Kennedy School of Government.
- Peter Egger, 2002. "An Econometric View on the Estimation of Gravity Models and the Calculation of Trade Potentials," The World Economy, Wiley Blackwell, vol. 25(2), pages 297-312, 02.
- Peter Egger, "undated". "An Econometric View on the Estimation of Gravity Models and the Calculation of Trade Potentials," WIFO Working Papers 141, WIFO.
- Helpman, Elhanan, 1987. "Imperfect competition and international trade: Evidence from fourteen industrial countries," Journal of the Japanese and International Economies, Elsevier, vol. 1(1), pages 62-81, March.
- Carrere, Celine, 2006. "Revisiting the effects of regional trade agreements on trade flows with proper specification of the gravity model," European Economic Review, Elsevier, vol. 50(2), pages 223-247, February. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:gda:wpaper:0901. 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: (Tomasz Brodzicki)
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.