Open AccessVulnerability of foreign trade of the Republic of Moldova analyzed on the basis of the gravity model
Author(s) -
Mircea Diavor,
AUTHOR_ID
Publication year - 2021
Publication title -
relaţii internaţionale plus
Language(s) - English
Resource type - Journals
eISSN - 2587-3393
pISSN - 1857-4440
DOI - 10.52327/1857-4440.2021.2(20).22
Subject(s) - gravity model of trade , the republic , bilateral trade , panel data , vulnerability (computing) , gravity equation , per capita , econometric model , economics , international trade , order (exchange) , international economics , econometrics , geography , china , demography , population , philosophy , theology , computer security , archaeology , finance , sociology , computer science
The article examines the vulnerability of foreign trade of the Republic of Moldova, based on the development and analysis of a gravity model, in order to determine and quantify the factors affecting foreign trade. The distance and economic size of the trading partners underlie the gravity model, and the model created by the author confirms these assumptions. Another factor analyzed on the basis of the elaborated model, using the GDP difference per capita between the Republic of Moldova and trading partners as an independent variable, confirms the relevance of Ricardo’s model. The analysis shows that free trade agreements have a positive effect on foreign trade, and the ,,Brussels effect” has a positive and significant impact on Republic of Moldova’s foreign trade. In the research we analyzed the gravity model for the Republic of Moldova with 20 trading partners by the econometric method of the regression panel data.