Regional integration and trade: controlling for varying degrees of heterogeneity in the gravity model

Stack, M ORCID: https://orcid.org/0000-0002-9213-7607, 2009. Regional integration and trade: controlling for varying degrees of heterogeneity in the gravity model. The World Economy, 32 (5), pp. 772-789.

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Abstract

Using a panel dataset of bilateral export flows from 12 EU countries to 20 OECD trading partners over the 1992–2003 period, this paper examines whether the effect on trade of European regional integration, denoted by an EU dummy, holds across a representative number of specifications for two gravity models, one based on the traditional trade determinants, the other based on newer trade theories (NTT). For both gravity model specifications the coefficient of the EU dummy declines in magnitude and becomes insignificant as an increasing degree of country heterogeneity is admitted into the model. This suggests the fundamental importance of the econometric specification when evaluating trade policy effects.

Item Type:	Journal article
Description:	The definitive version is available at www3.interscience.wiley.com
Publication Title:	The World Economy
Creators:	Stack, M.
Publisher:	Wiley-Blackwell
Date:	2009
Volume:	32
Number:	5
Identifiers:	Number Type 10.1111/j.1467-9701.2009.01180.x DOI
Divisions:	Schools > Nottingham Business School
Record created by:	EPrints Services
Date Added:	09 Oct 2015 11:17
Last Modified:	09 Jun 2017 13:54
URI:	https://irep.ntu.ac.uk/id/eprint/25440

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