Geographic proximity, trade and economic growth: a spatial econometrics approach

Abstract

This paper examines economic growth in terms of 'bilateral trade flow' and 'geographical distance' using the spatial dynamic panel data model for the period 1992-2016. The findings illustrate that the effect of spatial spillover or spatial dependence is one of the main economic growth determinants. Also, we find out that spatial relationships across countries and the spatial effects of trade are quite relevant. A country's economic growth is actually affected by the performance of its neighbours and trade partners. This result suggests that the spillover effects of geographical position and trade partners are the key determinants of economic growth. In fact, overlooking such factors can result in misspecification of models. In addition, the findings confirmed that growth rate of labour force has a negative impact on economic growth while the formation of gross fixed capital has a significant positive effect.

Growth spillover: a spatial dynamic panel data and spatial cross section data approaches in selected Asian countries

“…(3), economic growth is represented by y where N × 1 vector of dependent variable observations are collected at n points in space, X is N × K matrix of explanatory variables and ε i N × 1 is vector of normal errors which has constant variance. Given W ij represents N × N diagonal matrix containing distance-based weights (1)…”

“…Moreover, their results indicated that taxation has heterogeneous effects on income as a result of the type and sign of the tax coefficients b heterogeneous for the country-specific results. Amidi and Fagheh Majidi [1] investigated the geographical proximity, trade and economic growth with a spatial econometrics approach for EU countries over the period 1992-2016. They recognized that spatial relationships across countries and the spatial effects of trade are quite relevant.…”

“…The model illustrates supply of goods based on a production function of constant returns to scale, the diminishing returns of the scale of each factor of production and substitution between the factors. These functions are combined with the constant rate of payback and create a general equilibrium model [1]. Labor grows at a constant rate, the level of technology and savings rate are constant over time, and capital depreciates at a positive constant rate (that is, at each point in time, a constant fraction of the capital stocks wear out and therefore can no longer be used for production).…”

A multicountry measure of comovement and contagion in international markets: definition and applications

“… 19 On the importance of geographical proximity in the channels of propagation of crises, see, for example: De Gregorio and Valdes ( 2001 ), who argue that proximity of countries or regional effects are more important than trade links and/or macroeconomic similarities (ibid., p. 311), Glick and Rose ( 1999 ), ‏Amidi and Majidi ( 2020 ), Tobler ( 1979 ), and Sabkha et al ( 2019 ). …”

AB-27 ülkelerindeki ticaret ve ekonomik büyüme üzerine ekonometrik bir yaklaşım

“…Ayrıca AB ülke grubunun birbiri ile olan ticari ilişkisi ve bağlantısı düşünüldüğünde araştırmaya değer bir dinamiği bulunmaktadır. Çünkü kimi çalışmalar da bu husus coğrafi yakınlık ya da ikili ticaret akışı bağlamında ele alınmıştır (Amidi & Majidi, 2020). Bu çalışmanın evrenini oluşturan AB ülkelerinde İngiltere'nin de gruptan çıkmasından dolayı AB-28 yerine AB-27 ele alınmıştır.…”