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Gravity Modeling: International Trade And R&D

Author

Listed:
  • Josheski, Dushko
  • Fotov, Risto

Abstract

In this paper issue of gravity modeling in international trade has been investigated. Standard gravity equation augmented with other variables to control for transportation cost, whether trade partners are neighbors and whether country is landlocked, or countries participants in trade have had colonial history together. Also in our model we control whether traded commodities are homogenous, differentiated or high tech, as well referenced. Variable to denote technology are: TAI index, which stands for technological achievement index, also variables for creation and diffusion of technology, as measured by the number of patents from the residents and royalty and license fees receipts, by the foreign citizens. Results are as expected and the show that trade is highly dependent on the exporters and importers levels of technology.

Suggested Citation

  • Josheski, Dushko & Fotov, Risto, 2013. "Gravity Modeling: International Trade And R&D," MPRA Paper 45550, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:45550
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    File URL: https://mpra.ub.uni-muenchen.de/45550/1/MPRA_paper_45550.pdf
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    References listed on IDEAS

    as
    1. Enrico Spolaore & Alberto Alesina & Romain Wacziarg, 2000. "Economic Integration and Political Disintegration," American Economic Review, American Economic Association, vol. 90(5), pages 1276-1296, December.
    2. 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 488-495, August.
    3. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-116, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Key words: bilateral trade; gravity model; R&D; OLS; PPML;

    JEL classification:

    • F1 - International Economics - - Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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