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The Flow Model of Exports: An Introduction

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  • Mazurek, Jiri

Abstract

The aim of the paper is to propose a new simple frictionless model of international trade shares as an alternative to standard gravity models. In the proposed model (total) shares of export from a given country depend only on a gross domestic product and a distance of importing countries. The model is examined by a linear regression with corrected heteroscedasticity for the latest export data from Germany and the Czech Republic. Results show that the model is very successful in explaining export shares with coefficients of determinacy 0.75 and 0.98 respectively.

Suggested Citation

  • Mazurek, Jiri, 2014. "The Flow Model of Exports: An Introduction," MPRA Paper 52920, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:52920
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    References listed on IDEAS

    as
    1. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(2), pages 441-487.
    2. Baier, Scott L. & Bergstrand, Jeffrey H., 2009. "Bonus vetus OLS: A simple method for approximating international trade-cost effects using the gravity equation," Journal of International Economics, Elsevier, vol. 77(1), pages 77-85, February.
    3. 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 474-481, August.
    4. James E. Anderson, 2011. "The Gravity Model," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 133-160, September.
    5. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-116, March.
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    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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