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

Öz

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

Öz

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

Anahtar Kelimeler

• Gravity Model, Trade, Panel Data

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

Öz

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.

Anahtar Kelimeler

• Yerçekimi Modeli, Dış Ticaret, Panel Very Analizi

Kaynakça

1. ANDERSON, J. E. “A Theoretical Foundation for The Gravity Model.” American Economic Review vol. 69, 1979, pp. 106-116.
2. ANDERSON, J. E. and E. Van Wincoop, “Gravity with Gravitas: A Solution to the Border Puzzle.” Boston College Working Papers, 2000
3. ANTONUCCI, D. and S. Manzocchi, “Does Turkey Have a Special Trade Relation with the EU? A Gravity Model Approach.” Economic Systems vol. 30, 2006, pp. 157-169.
4. BERGSTRAND, J. H. “The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence.” Review of Econometrics and Statistics vol. 67, 1985, pp. 474-481.
5. BRUN J. F, C. Carrère, P. Guillaumont and J. De Melo. “Has Distance Died? Evidence from Panel Gravity Model.” World Bank Economic Review vol. 19, 2003, pp. 99-120.
6. BUSSIERE, M., Fidrmuc, J. and B. Schnatz, “Trade Integration of Central and Eastern European Countries: Lessons from a Gravity Model.” European Central Bank Working Paper Series no. 545, 2005
7. CHOI, C. “Linder Hypothesis Revisited.” Applied Economics Letters vol. 9, 2002, pp. 601-605.
8. DEARDORFF, Alan V. Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World? In Jeffrey A. Frankel, ed., The Regionalization of the World Economy. Chicago: University of Chicago Press. 1998

9. EGGER, P. “A Note on the Proper Econometric Specification of the Gravity Equation.” Economic Letters vol. 66, 2000, pp. 25-31.
10. FILLIPPINI, C. and V. Molini. “The Determinants of East Asian Trade Flows: A Gravity Model Approach.” Journal of Asian Economies vol. 14, 2003, pp. 695-711.
11. HUANG, R.R. “Distance and Trade: Disentangling Unfamiliarity Effects and Transport Cost Effects.” European Economic Review vol. 51, 2007, pp. 161- 181.
12. LINNEMANN, H. An Econometric Study of International Trade Flows, North Holland Publishing Company, Amsterdam, 1966
13. MAYER, T. and S. Zignago, “Notes on CEPII’s distances measures: The GeoDist database”, CEPII Working Paper 2011-25
14. MELITZ, J. “North, South and Distance in the Gravity Model.” European Economic Review vol. 51, 2007, pp. 871-991.
15. OKUBO, T. “Trade Bloc Formation in Inter-War Japan: A Gravity Model Analysis.” Journal of Japanese and International Economies vol. 21, 2006, pp. 214- 236.
16. ROSE, A. K. and M. M. Spiegel “A Gravity Model of Sovereign Lending: Trade, Default, and Credit.” IMF Staff Papers 51, 2004
17. TINBERGEN, J., Shaping the World Economy: Suggestions for an International Economic Policy, New York: The Twentieth Century Fund. 1962
18. WALL, H.J. “Using the Gravity Model to Estimate the Costs of Protection.” Federal Reserve Bank of St. Louis Discussion Paper 1: 33-40, 1999.
19. WONG, W.K. “Comparing the fit of the gravity model for different cross-border flows.” Economic Letters vol. 99, 2007, pp. 474-477.
20. ZARZOSO, I.M. and F.N. Lehmann. “Augmented Gravity Model: An Empirical Application to Mercosur- European Union Trade Flows.” Journal of Applied Economics vol. 6, 2003, pp. 291-316.