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A Gravity Model with Variable Coefficients: The EEC Trade with Third Countries
Author(s) -
Zhang Jie,
Kristensen Gustav
Publication year - 1995
Publication title -
geographical analysis
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 65
eISSN - 1538-4632
pISSN - 0016-7363
DOI - 10.1111/j.1538-4632.1995.tb00913.x
Subject(s) - gravity model of trade , economics , variable (mathematics) , gravity equation , econometrics , bilateral trade , international economics , international trade , mathematics , geography , mathematical analysis , archaeology , china
Gravity models with fixed coefficients have been used to explain the trade flows between countries different in income levels and separated by long distances. It is unrealistic to assume that these models can hold with the same parameters across very heterogeneous countries. This paper proposes and estimates an international trade model with variable coefficients constructed by combining Pöy‐hönen's and Linnemann's gravity‐based trade models via the expansion method.