The Gravity Model Approach: An Application on the Eco Was Trading Bloc

Luqman, Afolabi O.; Bakar, Nor Aznin Abu; Izraf, Azman Aziz Mukhriz

doi:10.1515/jeb-2016-0005

Cited by 8 publications

(5 citation statements)

References 68 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…It is notable that the elasticities of the importer's GDP were higher for the exports of manufactured products and machinery and transport equipment, while it was lower for the agricultural exports. Similarly, other studies confirmed from the various regions that the exporter and import GDPs enhance the bilateral exports between members of particular regions (Ekanayake et al, 2010;Luqman et al, 2016;Zainuddin et al, 2020). Contrary to the expectations, the population of exporters and importers exhibited that they are negatively related to various exports in some panels, even though it was insignificant for most of the panels.…”

Section: Gravity Model Estimates Of the Ppml: Regional Groupsmentioning

confidence: 73%

“…In addition, it reduces the exports of agricultural products while not significantly affecting the manufactured goods exports for LI and LMI countries. Luqman et al (2016) validated the positive effects of population on trade flows, which demonstrates the domestic market's desire for a variety of products. However, the majority of the literature indicated that there are contradicting impacts of population on bilateral trade flows (Brada & Mendez, 1993;Mátyás, 1997).…”

Section: Gravity Model Estimates Of the Ppml: Income Groupsmentioning

confidence: 77%

“…Besides, not only the ECI of the exporter is necessary for bilateral trade but also the importer's ECI because of the growing significance of intraindustry trade in intermediate goods (Lüthje, 2001). However, Luqman et al (2016) demonstrated that most gravity trade analysis mainly emphasizes inter-industry trade. Moreover, the exports of manufactured goods classified by material exhibited positive and significant results for exporter and destination countries.…”

Section: Gravity Model Estimates Of the Ppml: All Groupsmentioning

confidence: 99%

See 2 more Smart Citations

Economic Complexity and Bilateral Trade Flows in Selected Comesa and East Asia Countries

Abdi

Zaidi

Karim

2023

Technological and Economic Development of Economy

View full text Add to dashboard Cite

A particular country’s productive knowledge and sophistication become a crucial determinant for the exported products in the increasingly integrated global trade. However, studies that emphasize the connection between economic complexity and trade flows are still sparse. This research aims to examine the role of economic complexity on bilateral trade flows of 27 countries in COMESA and East Asia using the gravity model from 1995 till 2019. Based on countries’ geographical regions and income levels, the empirical estimation of the study applied the Poisson pseudo maximum likelihood (PPML) estimator. The main results are robust to various model specifications and consistent with the expectations of the gravity model indicators. The study found strong empirical evidence that the expansion of economic sophistication and diversification enlarges trade flows of different exported goods. Explicitly, economic complexity increases the exports of machinery and transport equipment alongside manufactured products, while its effects on agricultural exports are negligible. Thus, this study proposes that the countries should engage in more sophisticated Research and Development (R&D), attract multinational companies, establish industrial policies, and improve their productivity by utilizing the existing production network. They should move to a more diversified production and trade structure to enhance their bilateral trade flows.

show abstract

Section: Gravity Model Estimates Of the Ppml: Regional Groupsmentioning

confidence: 73%

Section: Gravity Model Estimates Of the Ppml: Income Groupsmentioning

confidence: 77%

Section: Gravity Model Estimates Of the Ppml: All Groupsmentioning

confidence: 99%

See 1 more Smart Citation

Economic Complexity and Bilateral Trade Flows in Selected Comesa and East Asia Countries

Abdi

Zaidi

Karim

2023

Technological and Economic Development of Economy

View full text Add to dashboard Cite

show abstract

“…Luqman et al [10] analyze the structure of bilateral trade and the level of openness of ECOWAS through a gravity model using three techniques: Pseudo Poisson maximum likelihood (PPML), Fully Modified Ordinary Least Squares (FMLOS) and Regression Canonical Cointegration (CCR), for the period from 1981 to 2003. Trade openness was negatively significant under PPML, while financial openness was negatively significant under FMOLS and CCR.…”

Section: Fajimolu and Olayemimentioning

confidence: 99%

Factors Explaining the Weakness of Intra-Regional Trade Flows in the ECOWAS Region

Ndao

2023

JEMT

View full text Add to dashboard Cite

With a GDP of over 628 billion dollars and a population of over 350 million, ECOWAS (Benin, Burkina Faso, Côte d'Ivoire, Ghana, Guinea, Mali, Niger, Nigeria, Senegal and Togo) was set to be one of Africa's most powerful economic blocs. However, at ECOWAS level, intracommunity trade is still low, and its share of world trade is around 0.3%. Moreover, intracommunity trade, which is estimated at 10% of the region's total trade, is also low compared with other regional blocs. The main objective of this article is to identify the main factors explaining the evolution of trade within ECOWAS. The augmented gravity model is used to show that economic and structural factors have a significant impact on intra-regional trade. Geographic, demographic and institutional factors play a key role in the evolution of intraregional trade.

show abstract

“…Afolabi O. Luqman, Nor Aznin Abu Bakar and Azman Aziz Mukhriz Izraf in their study, examined the bilateral trade flow across ECOWAS-15 nations with the use of a panel and cross section for the period of 1981-2013 and investigated the formational impact of regional trade integration agreements on trade flows within a group of countries using the same currencies and ECOWAS at large. They used various techniques of estimation for the gravity model, mainly static and dynamic and the results of their study showed the presence of a strong relationship among the factors of trade flows and regional trade integration agreements [9]. Abdulmenaf Sedjini and Ilirjana Kraja in their paper provided some theoretical and empirical considerations regarding trade development with the focus on export-imports in Albania in relation to the Free Trade Agreements, and applied the gravity model of trade for Albanian case in relation to its 27 export/imports countries.…”

Section: Literature Reviewmentioning

confidence: 99%

The Impact of China One Belt One Road on Abidjan Port Development Based on Gravity Model

Gamassa¹,

Chen²

2017

IJTEF

View full text Add to dashboard Cite

Being one of the most competitive ports in West Africa, Abidjan Port aims to become the leading port in the region. In this article, the impact of China One Belt One Road strategy on Abidjan port is being studied and analyzed by the Chinese investment on Abidjan port and also the analysis of the trade potential between China and Ivory Coast. The Gravity Model is applied through a Hausman test and an empirical test to determine the significant variables affecting the bilateral trade between the two countries. During the application of the Hausman test, the null hypothesis was rejected and the fixed effect model was found to be the most appropriate model to use. The results found, showed that the population and the gross domestic product (GDP) are the two factors which have a great influence on the bilateral trade between these two countries. It has also been found that there is a large trade potential between the two countries. The time series model is used with the autoregressive model to forecast the China export trade value to Ivory Coast from 2016 to 2018. Some strategies have also been suggested for the development of Abidjan port with the support from the China One Belt One Road strategy.

show abstract

The Gravity Model Approach: An Application on the Eco Was Trading Bloc

Cited by 8 publications

References 68 publications

Economic Complexity and Bilateral Trade Flows in Selected Comesa and East Asia Countries

Economic Complexity and Bilateral Trade Flows in Selected Comesa and East Asia Countries

Factors Explaining the Weakness of Intra-Regional Trade Flows in the ECOWAS Region

The Impact of China One Belt One Road on Abidjan Port Development Based on Gravity Model

Contact Info

Product

Resources

About