Globalization and export flows between Eurasian Economic Union countries: a gravity model approach
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Date
2020
Authors
Abakumova, Juliet
Primierova, Olena
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Abstract
In the empirical tools for the research of trade integration a
special place is occupied by gravity models, insofar as these models have
rather high accuracy in explaining mutual trade flows. Recently, however,
the gravity model approach has been subjected to critical rethinking:
globalization brought considerable changes not only in economic growth,
but also in international trade, what allowed speaking about a “Death of
Distance”. At the same time, estimates based on gravity models almost
always demonstrated an increase in the coefficient of distance as a proxy
for transport costs, which contradicts the general perception of the
phenomenon of globalization. The paper is devoted to testing the validity
of inclusion of the globalization index in the model, which would allow
consider the role of globalization in bilateral cross-country trade, as well as
testing the hypothesis of reducing the coefficient of distance. Based on the
annual panel data over the period 2000-2016 the trade integration model
for the EEU countries was estimated. To test the hypothesis of a decrease
in the estimated coefficient of distance over time, the gravity model was
also evaluated at different time intervals. And the positive impact of the
globalization factor on the volume of exports is revealed.
Description
Keywords
globalization, trade integration, export flows, conferance materials
Citation
Abakumova Ju. Globalization and export flows between Eurasian Economic Union countries: a gravity model approach [electronic resource] / Abakumova Ju., Primierova O. // Globalization and Its Socio-Economic Consequences - Sustainability in the Global-Knowledge Economy : 19th International Scientific Conference / edited by: Kliestik T.. - Rajecke Teplice, Slovakia, 2020. - Vol. 74. - Article Number: 06001.