MODELLING TRADE FLOWS BETWEEN TURKEY AND FORMER SOVIET UNION COUNTRIES: A GRAVITY ANALYSIS

Year 2014, Volume: 36 Issue: 1, 391 - 408, 13.03.2015

Burcu Düzgün Öncel , Mahmut Tekçe

Abstract

MODELLING TRADE FLOWS BETWEEN TURKEY AND FORMER SOVIET UNION COUNTRIES: A GRAVITY ANALYSIS

Abstract

Gravity model has been long used in order to describe bilateral trade patterns by including incomes, populations and distance between countries. In this respect, the bilateral trade relationship between Turkey and former Soviet Union countries is examined. When dependent variable is the total trade volume, only GDP levels of the former Soviet Union countries and Turkey are significant. When EU and WTO dummies are added to the model, distance become significant at 10% and has a small negative impact. On the other hand, when nonoil trade volume is the dependent variable inclusion of dummies make distance significant. Although the significance levels do not change the magnitude of the coefficients and goodness of fit increases. Additionally, GDP per capita for Turkey has more impact on trade volume than GDP per capita of former Soviet Union countries

Keywords

Gravity Model, Trade, Panel Data

MODELLING TRADE FLOWS BETWEEN TURKEY AND FORMER SOVIET UNION COUNTRIES: A GRAVITY ANALYSIS

Abstract

Gravity model has been long used in order to describe bilateral trade patterns by including incomes, populations and distance between countries. In this respect, the bilateral trade relationship between Turkey and former Soviet Union countries is examined. When dependent variable is the total trade volume, only GDP levels of the former Soviet Union countries and Turkey are significant. When EU and WTO dummies are added to the model, distance become significant at 10% and has a small negative impact. On the other hand, when nonoil trade volume is the dependent variable inclusion of dummies make distance significant. Although the significance levels do not change the magnitude of the coefficients and goodness of fit increases. Additionally, GDP per capita for Turkey has more impact on trade volume than GDP per capita of former Soviet Union countries.

Keywords

Yerçekimi Modeli, Dış Ticaret, Panel Very Analizi

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