The Gravity Model Analysis of Bangladesh's Trade: A Panel Data Approach

Abstract

The article applies generalized gravity models to analyze Bangladesh's bilateral trade pattern using the panel data estimation technique. The results reveal that Bangladesh's trade is positively determined by the size of the economies, per capita gross domestic product differential and openness of the trading countries. Bangladesh's exports are positively determined by its income, partner countries' total import demand and openness, but negatively determined by partner countries' income and domestic inflation. Bangladesh's imports are positively determined by income of trading countries and degree of openness of the partner countries and negatively determined by partner countries' inflation. Transportation costs affect Bangladesh's trade negatively.

Determinants of the exports of Hungary: Trade theory and the gravity model

“…Empirical analyses focused on several factors influencing trade, such as borders (McCallum (1995); Wei (1996); Anderson-van Wincoop (2001); Mayer-Zignago (2005)), factor endowment (Rahman (2003); Schumacher (2003); Sohn (2005) ;Eicher et al (2012); Shirotori et al (2010)), common language and colonial linkages (Hutschinson (2002); Head et al (2010); Oh et al (2011);Felbermayr-Toubal (2006); Martinez-Zarzoso (2003)); institutions and corruption (AndersonMarcouiller (2002);de Groot et al (2004)); free trade agreements and regional integrations ((Martinez-Zarzoso (2003); Baier-Bergstrand (2007); Carrere (2006); Soloaga-Winters (2001) ;Jugurnath et al (2007); Coulibaly (2009) ;Anderson-Yotov (2011); Rose-van Wincoop (2001); Vicard (2009) ;Frankel-Wei (1998)). …”

“…In our analysis we used the gravity model of trade which lies at the center of recent international trade researches. Similar studies include Rahman (2003), Schumacher (2003) and Sohn (2005); and we followed the methodology of Eicher et al (2012) and Shirotori et al (2010). Our empirical results confirm the previous findings: the greater the differences in the factor endowment variables, the less the trade volume between Hungary and its trading partner, therefore the H-O model is inconsistent also in the case of Hungary.…”

A hat legnagyobb latin-amerikai ország exportjának vizsgálata gravitációs modellel

“…Az empirikus vizsgálatok olyan tényezők kereskedelemre gyakorolt hatását mérték, mint például a szomszé-dosság (McCallum [1995], Wei [1996], Anderson-van Wincoop [2001], MayerZignago [2005]); a tényezőellátottság (Rahman [2003] Frankel-Wei [1998]). …”

Export Barriers and Stimuli in the Russian Federation

“…Especially, some works should be mentioned here: Suvankulov and Guc (2012) -gravity model of trade (panel data approach) for the Central Asia; Felipe and Kumar (2012) -gravity model of trade (standard approach) for the Central Asia with the LPI index introduced as a dummy variable; and Rahman (2003) -gravity model (panel data approach) applied to the Bangladesh's trade. Iwasaki and Suganuma (2013) and Weckström (2013) should be mentioned as authors of works dedicated to Russian international trade.…”

“…Scientific works of Rahman (2003) and Felipe and Kumar (2012) were used to create this model. Due to the mathematical nature of the research any possible barrier with the opposite sign can be also considered as a stimulus and vice versa.…”