On the Gravity Equation of Trade: A Case of Germany

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F47813059%3A19520%2F16%3A00010555" target="_blank" >RIV/47813059:19520/16:00010555 - isvavai.cz</a>

Výsledek na webu

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DOI - Digital Object Identifier

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Jazyk výsledku

angličtina

Název v původním jazyce

On the Gravity Equation of Trade: A Case of Germany

Popis výsledku v původním jazyce

Gravity models (equations) of trade belong among the most successful empirical tools in the modern economics since their first economic applications in the yearly 1960s. They assume that bilateral trade is directly proportional to economic sizes (usually described in terms of GDP or income) of both trading partners and inversely proportional to their distance. The aim of this study was to examine Germany latest (2012) yearly aggregate exports to its major international partners by a gravity equation without and with selected trade frictions including a geographical adjacency (the so called border effect), an influence of the same or different currency (Euro), and a location in the Schengen Area, the zone of a free movement of persons. Gravity models both without and with selected trade frictions fitted the data well, while the model with frictions performed significantly better. The adjacency was found the most important single trade friction, the location in the Schengen Area appeared to be the least important friction (but it was still statistically significant). Other feasible trade frictions, such as border length, a location in Europe or democracy index were examined too, but their effect on the trade was rather negligible. A possible explanation of the border effect, based on information deficiency, is included in the study as well. Furthermore, it was observed that yearly Germany exports data are susceptible to large year-to-year fluctuations especially for countries with low imports. Therefore, using averaged data over five or ten years long periods might be more appropriate.

Název v anglickém jazyce

On the Gravity Equation of Trade: A Case of Germany

Popis výsledku anglicky

Gravity models (equations) of trade belong among the most successful empirical tools in the modern economics since their first economic applications in the yearly 1960s. They assume that bilateral trade is directly proportional to economic sizes (usually described in terms of GDP or income) of both trading partners and inversely proportional to their distance. The aim of this study was to examine Germany latest (2012) yearly aggregate exports to its major international partners by a gravity equation without and with selected trade frictions including a geographical adjacency (the so called border effect), an influence of the same or different currency (Euro), and a location in the Schengen Area, the zone of a free movement of persons. Gravity models both without and with selected trade frictions fitted the data well, while the model with frictions performed significantly better. The adjacency was found the most important single trade friction, the location in the Schengen Area appeared to be the least important friction (but it was still statistically significant). Other feasible trade frictions, such as border length, a location in Europe or democracy index were examined too, but their effect on the trade was rather negligible. A possible explanation of the border effect, based on information deficiency, is included in the study as well. Furthermore, it was observed that yearly Germany exports data are susceptible to large year-to-year fluctuations especially for countries with low imports. Therefore, using averaged data over five or ten years long periods might be more appropriate.

Druh

J_imp - Článek v periodiku v databázi Web of Science

CEP obor

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OECD FORD obor

50204 - Business and management

Projekt

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Návaznosti

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Rok uplatnění

2016

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název periodika

E+M Ekonomie a management

ISSN

1212-3609

e-ISSN

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Svazek periodika

19

Číslo periodika v rámci svazku

3

Stát vydavatele periodika

CZ - Česká republika

Počet stran výsledku

11

Strana od-do

20-30

Kód UT WoS článku

000386122400002

EID výsledku v databázi Scopus

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