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Gravity Modeling: International Trade and Innovations

Author

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  • 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 Innovations," EconStor Preprints 71060, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:71060
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    File URL: https://www.econstor.eu/bitstream/10419/71060/1/Gravity%20model%20dushko%20Fotov.pdf
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    References listed on IDEAS

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    6. Jacob A. Bikker, 1987. "An International Trade Flow Model with Substitution: An Extension of the Gravity Model," Kyklos, Wiley Blackwell, vol. 40(3), pages 315-337, August.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    gravity model; bilateral trade;

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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