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Journals / Kafkas Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi / 2019 / Cilt: 10 Sayı: 20

MULTI-DIMENSIONAL PANEL DATA GRAVITY MODEL: AN ANALYSIS OF APEC COUNTRIES

Hatice Nazan Çağlar(ISTANBUL KULTUR UNIVERSITY)0000-0003-2152-8747
Elanur Türküz(ISTANBUL KULTUR UNIVERSITY)0000-0002-5176-7792
Pages
1007–1027
Publication Date
2019-12-31
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AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

By using a three dimensional panel gravity model with a least squares dummy variable approach we were able to identify countries with stronger propensities to import and export.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:The traditional gravity model of international trade has been through many changes in order to develop and answer new research questions .
📊
Key Findings & Data:Taking this development into account this paper investigates a more enhanced panel data approach by extending the classic approach by allowing for both indiviual and time effects to be apparent in order to capture country specific and time effects with a multidimensional panel data model for APEC countries.
💡
Conclusion & Impact:By using a three dimensional panel gravity model with a least squares dummy variable approach we were able to identify countries with stronger propensities to import and export.
🔬Design:Modeling & Simulation
📍Scope:Comprehensive Sample
⚙️Variables:International Trade · Gravity Model

Özet

The traditional gravity model of international trade has been through many changes in order to develop and answer new research questions . Taking this development into account this paper investigates a more enhanced panel data approach by extending the classic approach by allowing for both indiviual and time effects to be apparent in order to capture country specific and time effects with a multidimensional panel data model for APEC countries. By using a three dimensional panel gravity model with a least squares dummy variable approach we were able to identify countries with stronger propensities to import and export.

🔖

Cite This Article

Çağlar, H. N., Türküz, E. (2019). MULTI-DIMENSIONAL PANEL DATA GRAVITY MODEL: AN ANALYSIS OF APEC COUNTRIES. Kafkas Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, Cilt: 10 Sayı: 20, 1007–1027. https://doi.org/10.36543/kauiibfd.2019.043

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References (22)

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  3. H.B. (2008). Econometric analysis of panel data. England: John Wiley & Sons, Ltd. Bergstrand, J.H. (1989). The generalized gravity equation, monopolistic competition, and the factor-proportions theory in international trade. The Review of Economics and Statistics, 71(1), 143-153.Cheng, I.H., & Wall, J.H. (2005). Controlling for heterogeneity in gravity models of trade and integration. Economic Research Federal Reserve Bank of St. Louis, 87(1), 49-63.Deardorff, A.V. (1995). Determinants of bilateral trade: does gravity work in neoclassical world?. National Bureau of Economic Research, Working Paper, (5377), https://www.nber.org/papers/w5377.Egger, P., & Pfaffermayr, M. (2003). The proper econometric specification of the gravity equation: a three-way model with bilateral interaction effects. Empirical Economics, 28, 571-580.
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  7. Keum, K. (2010). Tourism flows and trade theory: a panel data analysis with the gravity model, The Annals of Regional Science, 44(3), 541-557.
  8. Kadaroo, J., & Seetanah, B. (2008). The role of transport infrastructure in international tourism development: a gravity model approach. Tourism Management, 29, 831-840.Krugman, P. (1980). Scale economies, product differentiation and the pattern of trade, The American Economic Review, 70(5), 950-959.Linnemann, H. (1966). An econometric study of international trade flows, Amsterdam: North-Holland Publishing Co.Lowe, J.M., & Sen, A. (1996). Gravity model applications in health planning. analysis of an urban hospital market. Journal of Regional Science, 36(3), 437-461.Mansfield E.D., & Bronson, R. (1994). Alliances, preferential trading arrangements and international trade. American Political Science Review, 91(1), 94-107.Mansfield E.D., & Gowa J. (1993). Power politics and international trade. The American Political Science Review, 87(2), 408-420.
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  11. C., Rossello, J., & Gallego, M.S. (2014). Gravity models for tourism demand: theory and use. Annals of Tourism Research, 48, 1-40.Ohlin, B. (1933). Interregional and international trade. Cambridge: Harvard University Press.
  12. Aitken, N. D. (1973). The effect of the EEC and EFTA on european trade: a temporal cross-section analysis. The American Economic Review, 63(5), 881-892.
  13. Anderson, J. (1979). A theoretical foundation for the gravity equation. The American Economic Review, 69(1), 106-116.APEC (Asia Pacific Economic Cooperation). (2015). Asia pacific economic cooperation, achievements and benefits. https://www.apec.org/About-Us/About-APEC/Achievements-and-Benefits. 20.01.2019Balazsi, L., Matyas, L., & Wansbeek, T. (2018). The estimation of multidimensional fixed effects panel data models. Econometric Reviews, 37(3), 212-227.Baldwin, R., & Taglioni, D. (2006). Gravity for dummies and dummies for gravity equations. National Bureau of Economic Research, Working Papers, (12516), https://www.nber.org/papers/w12516.Baltagi,
  14. H.B. (2008). Econometric analysis of panel data. England: John Wiley & Sons, Ltd. Bergstrand, J.H. (1989). The generalized gravity equation, monopolistic competition, and the factor-proportions theory in international trade. The Review of Economics and Statistics, 71(1), 143-153.Cheng, I.H., & Wall, J.H. (2005). Controlling for heterogeneity in gravity models of trade and integration. Economic Research Federal Reserve Bank of St. Louis, 87(1), 49-63.Deardorff, A.V. (1995). Determinants of bilateral trade: does gravity work in neoclassical world?. National Bureau of Economic Research, Working Paper, (5377), https://www.nber.org/papers/w5377.Egger, P., & Pfaffermayr, M. (2003). The proper econometric specification of the gravity equation: a three-way model with bilateral interaction effects. Empirical Economics, 28, 571-580.
  15. Frankel, J.A., & Romer, D. (1996). Trade and growth: an empirical investigation. National Bureau of Economic Research, Working Paper, (5476), https://www.nber.org/papers/w5476.
  16. Head, K., & Mayer, T. (2002). Illusory border effects: distance mismeasurement inflates estimates of home bias in trade. Centre d'etudes prospectives et d'informations internationales, Working Papers, (2002-01), http://www.cepii.fr/PDF_PUB/wp/2011/wp2011-25.pdf.
  17. Heckscher, E. (1919). The effect of foreign trade on the distribution of income. Ekonomisk Tidskrift, 21, 497-512.Hsiao, C. (2003). Analysis of panel data. New York: Chambridge University Press.
  18. Keum, K. (2010). Tourism flows and trade theory: a panel data analysis with the gravity model, The Annals of Regional Science, 44(3), 541-557.
  19. Kadaroo, J., & Seetanah, B. (2008). The role of transport infrastructure in international tourism development: a gravity model approach. Tourism Management, 29, 831-840.Krugman, P. (1980). Scale economies, product differentiation and the pattern of trade, The American Economic Review, 70(5), 950-959.Linnemann, H. (1966). An econometric study of international trade flows, Amsterdam: North-Holland Publishing Co.Lowe, J.M., & Sen, A. (1996). Gravity model applications in health planning. analysis of an urban hospital market. Journal of Regional Science, 36(3), 437-461.Mansfield E.D., & Bronson, R. (1994). Alliances, preferential trading arrangements and international trade. American Political Science Review, 91(1), 94-107.Mansfield E.D., & Gowa J. (1993). Power politics and international trade. The American Political Science Review, 87(2), 408-420.
  20. Matyas, L. (1997). Proper econometrics specification of the gravity model. The World Economy, 20(3), 363-368.
  21. Mayer, T., & Zignago, S. (2011). Notes on CEPII’s distance measures: the geodist database. Centre d'etudes prospectives et d'informations internationales, Working papers, (25), http://www.cepii.fr/PDF_PUB/wp/2011/wp2011-25.pdf.Morley,
  22. C., Rossello, J., & Gallego, M.S. (2014). Gravity models for tourism demand: theory and use. Annals of Tourism Research, 48, 1-40.Ohlin, B. (1933). Interregional and international trade. Cambridge: Harvard University Press.