The determinants of East Asian trade flows: a gravity equation approach

Filippini, Carlo; Molini, Vasco

doi:10.1016/j.asieco.2003.10.001

Cited by 92 publications

(73 citation statements)

References 9 publications

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“…The tolerance values for the variables used in the estimated gravity model are always higher than 0.1. 21 _________________________ 19 In Márquez-Ramos (2007), a different way to add technological innovation in the trade equation was considered: the variable included was the technological distance between trading partners (Filippini and Molini 2003). A negative correlation between this new variable and the export flows was found.…”

Section: Mercosur (Southernmentioning

confidence: 99%

The Effect of Technological Innovation on International Trade

Márquez‐Ramos

Martínez‐Zarzoso

2010

Economics

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In this paper, the effect of technological innovation on sectoral exports is analysed using a gravity model of trade. The technological achievement index (TAI) and its four components, creation of technology, diffusion of old innovations, diffusion of recent innovations and human skills, are used as proxies for technological innovation. The two first components are considered proxies for knowledge acquisition and assimilation (potential absorptive capacity), whereas the last two are taken as proxies for knowledge transformation and exploitation (realised absorptive capacity). We hypothesise that the effect of technological innovation on trade could vary according to the technological achievement by generating a non-linear relationship between technological innovation and trade. Our findings indicate a positive and non-linear effect of technological innovation on export performance, which indicates that there are thresholds for positive signs to occur. To foster exports, countries have to consider not only acquisition and assimilation capabilities, but also transformation and exploitation capabilities once a minimum level of potential absorptive capacity has been achieved.

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Section: Mercosur (Southernmentioning

confidence: 99%

The Effect of Technological Innovation on International Trade

Márquez‐Ramos

Martínez‐Zarzoso

2010

Economics

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“…Hence, gravity equations have been used extensively in the empirical literature on international trade (Havrylyshin and Pritchett, 1991;Frankel and Wei, 1993;Bayoumi and Eichengreen, 1997;Evenett and Hutchinson, 2002). Filippini (2003) used a gravity Equation model to analyze trade flows between East Asian industrializing countries (including China) and some developed countries in order to show the remarkable trade performance of East Asian countries. The study showed that all coefficient signs were consistent with model assumptions and found high propensity of Asian countries (including China but excluding Japan) to exchange high-tech manufactured products with Japan and USA.…”

Section: Literature Reviewmentioning

confidence: 99%

Import Inflows of Bangladesh: the Gravity Model Approach

Alam¹,

Uddin²,

Taufique³

2009

IJEF

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Bangladesh suffers from a chronic deficit in her trade balance. The paper is an attempt to explore the imports of Bangladesh which is one of the most significant factors responsible for unfavorable trade balance of the country. The aim of the study is to intend some initiatives for an attempt to ultimately reshaping the trade balance of Bangladesh with her foreign trade partners. The paper examines the existence of the gravity theory for the imports of Bangladesh with its eight major trading partner countries-India, China, Singapore, Japan, Hong Kong, South Korea, USA and Malaysia. The data set consists of yearly data from 1985 to 2003 in a panel approach. The paper comes across with the findings that the gravity theory is consistent with the imports of Bangladesh. That is, the geographical distance of Bangladesh with its partner countries has significant impacts on its imports. But in near future this may change because of different factors such as profitability, easy trade procedures, product delivery time etc. that influence the imports decision more than does the geographical distance. This paper finds mixed relationship between the GDP and imports of Bangladesh. It also shows that the imports of Bangladesh influence the domestic production very little because Bangladesh mostly imports consumer goods rather than capital goods. Moreover, the population of Bangladesh has significant impacts on imports which in turn implies that Bangladesh is not capable of producing adequate consumer goods to meet the increased demand resulted from high population growth. It also shows that partner countries' GDP has significant positive impacts and partner countries' population has mixed impact on imports of Bangladesh. This paper concludes that it will be an alarming situation for trade balance of Bangladesh if the imports continue to increase in such a pattern that the rate increases five to eight times more in respect of population increases and at the same time the ratio of capital goods in proportion of total imports decreases.

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“…This is because the model may not be able to capture the whole space of all possible factors that must be controlled (such as historical factors, cultural factors, etc.). In order to control for this heterogeneity problem, the fixed effects (FE) model is generally employed by introducing country-pair fixed effects, ij , to capture the effects of all other omitted country-pair specifics that remain constant over time 5 .…”

Section: Dist Con Ij Langmentioning

confidence: 99%

“…4 Trade diversion effects are usually defined when the estimated coefficient of α 10 or α 11 is significant and negative. 5 The Hausman [13] specification test was performed to examine the null hypothesis of no correlation between the random effects and the regressors. The Hausman test rejected this null hypothesis and suggested the use of the fixed-effect model estimator in this study.…”

Section: Dist Con Ij Langmentioning

confidence: 99%

“…Sudsawasd and Mongsawad [4] find large trade potentials remaining to be explored between the ASEAN-5 (Indonesia, Malaysia, Philippines, Singapore, and Thailand) and ASEAN's four major trading partners (China, Japan, India, and the United States). In addition, East Asian countries are found to have been the leading exporters to developed countries since the 1970s (Filippini and Molini [5]). …”

Section: Introductionmentioning

confidence: 99%

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Trade Integration in East Asia: An Empirical Assessment

Sudsawasd¹

2012

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This study employs a gravity model of bilateral trade flows at the one-digit level of the standard international trade classification (SITC) product categories over the period of 1996 to 2005 to provide an empirical assessment of regional trade integration in East Asia. The formation of the ASEAN free trade area agreement is found to have both positive and negative effects on trade both among members and between members and the rest of the world, subject to SITC product category. Although the differences between actual and predicted levels of intra-ASEAN trade and of trade between ASEAN and other East Asian countries have been reduced, there remain product categories indicating a low degree of trade integration. Those product categories include food and live animals, machinery and transport equipment, and miscellaneous manufactured articles. Finally, the level of intra-industry trade intensity based on predicted trade values confirms that ASEAN is involved in intra-industry trade among its members more than trade with other East Asian countries.

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The determinants of East Asian trade flows: a gravity equation approach

Cited by 92 publications

References 9 publications

The Effect of Technological Innovation on International Trade

The Effect of Technological Innovation on International Trade

Import Inflows of Bangladesh: the Gravity Model Approach

Trade Integration in East Asia: An Empirical Assessment

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