Gravity Model by Panel Data Approach An Empirical Application with Implications for South Asian Countries

Foreign Trade Review 50 (4), 233-249

Posted: 2 Oct 2017

See all articles by Sushil Kumar

Sushil Kumar

Jamia Millia Islamia (A Central University)

Shahid Ahmed

Jamia Millia Islamia (A Central University) - Economics

Date Written: October 12, 2015

Abstract

This article has examined the determinants of export and import flows of countries in the South Asia through estimations for a country panel data of eight countries during the period 1985–2011 using a gravity model. The estimated result suggests that gross domestic product (GDP) and population among other factors can explain export and import flows. Perhaps the most important finding of the study is that South Asia Free Trade Agreement (SAFTA) has produced trade creation among its members. Finally, the study found that geographic distance might be impeding trade, and tariff has negative effect on the trade. The study also found that the nature of trade is intra-industry among the member countries of South Asian Association for Regional Cooperation (SAARC).

Suggested Citation

Kumar, Sushil and Ahmed, Shahid, Gravity Model by Panel Data Approach An Empirical Application with Implications for South Asian Countries (October 12, 2015). Foreign Trade Review 50 (4), 233-249. Available at SSRN: https://ssrn.com/abstract=3046088

Sushil Kumar

Jamia Millia Islamia (A Central University) ( email )

Jamia Nagar
New Delhi, Haryana 122002
India

Shahid Ahmed (Contact Author)

Jamia Millia Islamia (A Central University) - Economics ( email )

Jamia Nagar
New Delhi, 110025
India

HOME PAGE: http://jmi.ac.in/economics/faculty-members/Prof_Shahid_Ahmed-1783

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