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Modelling Export Activity of Eleven APEC Countries

  • László Mátyás

    (Central European University, Hungary, Budapest University of Economics, Hungary)

  • László Kónya

    (Victoria University, Australia)

  • Mark N. Harris

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne and Central European University, Hungary)

The gravity model has long been used for modelling and predicting trade flows. This paper generalises the gravity model allowing for proper representation of local and target country effects and also the business cycle. The new approach is based on a panel data framework (instead of a simple cross sectional or time series approach) where the additional information available from using both types of dat a (i. e. cross sectional and time series) is utilised to properly model all the specific effects. The model is applied to a panel of APEC countries.

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Paper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2000n05.

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Length: 20 pages
Date of creation: Mar 2000
Date of revision:
Handle: RePEc:iae:iaewps:wp2000n05
Contact details of provider: Postal: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia
Phone: +61 3 8344 2100
Fax: +61 3 8344 2111
Web page: http://www.melbourneinstitute.com/
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  1. Matyas, L. & Konya, L. & Harris, M.N., 1997. "Modelling Export Activity in a Multicountry Economic Area : The APEC Case," Monash Econometrics and Business Statistics Working Papers 1/97, Monash University, Department of Econometrics and Business Statistics.
  2. Bergstrand, Jeffrey H, 1985. "The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 474-81, August.
  3. Brad Christerson, 1994. "World Trade in Apparel: An Analysis of Trade Flows Using the Gravity Model," International Regional Science Review, , vol. 17(2), pages 151-166, August.
  4. Frankel, Jeffrey & Stein, Ernesto & Wei, Shang-jin, 1995. "Trading blocs and the Americas: The natural, the unnatural, and the super-natural," Journal of Development Economics, Elsevier, vol. 47(1), pages 61-95, June.
  5. Thursby, Jerry G & Thursby, Marie C, 1987. "Bilateral Trade Flows, the Linder Hypothesis, and Exchange Risk," The Review of Economics and Statistics, MIT Press, vol. 69(3), pages 488-95, August.
  6. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-16, March.
  7. Laszlo Matyas, 1997. "Proper Econometric Specification of the Gravity Model," The World Economy, Wiley Blackwell, vol. 20(3), pages 363-368, 05.
  8. 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 881-92, December.
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