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Determinants of Net Trade Flows in the OECD: New Evidence with Special Emphasis on the Former Communist Members
Author(s) -
Martín Carmela,
Velázquez Francisco J.
Publication year - 2002
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/1467-9396.00322
Subject(s) - economics , endowment , investment (military) , international economics , order (exchange) , communism , panel data , international trade , bilateral trade , gravity model of trade , econometrics , china , politics , philosophy , epistemology , finance , political science , law
This study estimates an econometric panel‐data model, in order to explore the capacity of some of the hypotheses formulated in recent dynamic models of trade and economic growth to explain the bilateral trade of OECD countries. The study suggests that the larger a country’s endowment of both tangible and intangible (human and technological) capital in relation to that of its trade partners, the higher the export/import ratio of its bilateral trade. It also shows that direct investment enhances the export/import ratio with the host country. The former communist countries reflect only minor differences from the other OECD members.