This paper investigates the impact of the US and China’s foreign aids to Africa on trade flows between donor and recipient countries. Evidence from the gravity model estimates reveals that the two donors’ exports are strengthened by their aids to African partners. Interestingly, China’s aid shows a positive effect on its total volume of trade and imports from Africa, while the aid from the US e...

This paper utilizes an enhanced gravity model to estimate the effect of lagged immigration waves on Canadian imports and exports, by province. Empirically, this model was tested using Canadian data on import and export flows to the top 40 countries of origin for immigrants to Canada based upon the composition of the most recent wave of immigrants. The results are consistent with previous studie...

Regional Trade Agreements such as ASEAN Free Trade Area (AFTA) are expected to increase the trade flows among member countries through trade creation and trade diversion. This paper employs the gravity model using manufacturing trade data to analyse this hypothesised effect in a time-varying context. The estimation results suggest that AFTA has expanded the trade substantially. The trade creati...

While the gravity model has been one of the most successful applications in empirical trade, various attempts are still made to improve its regression results. One of the recent developments in the econometric technique is to extend the gravity model to a panel data framework and take into consideration the existence of dynamic effects. In this paper, we apply these new techniques to examine th...

China’s trade with Africa has increased significantly in the past two decades. The effects of these growing trade volumes (and financial flows) are quite contested. The purpose of this paper is to study the effects of growing Chinese influence in Africa on the intra-regional trade in the continent. This paper estimates a traditional gravity model using Poisson pseudo-maximum-likelihood estimati...

Using bilateral data on remittance flows to Pakistan for 23 major host countries, in the first study of its kind, the authors examine the effect of transaction costs on foreign remittances. They find that the effect of transaction costs on remittance flows is negative and significant; suggesting that a high cost will either refrain migrant’s from sending money back home or make them remit throu...

This paper investigates the relationship between intra-industry trade (IIT) and immigration flows using a gravity model for the period 2000-2010 between Portugal and European Union’s Member States (EU-27). The present study uses the methodology of Kandogan (2003) for separating IIT into its components horizontal (HIIT) and vertical intra-industry trade (VIIT).Using a panel data approach, our st...

This paper investigates how well the gravity model explains various cross-border flows that may lead to knowledge spillovers. It turns out that the model works well for trade and telephone traffic, but less satisfactorily for merger and acquisition flows. © 2007 Elsevier B.V. All rights reserved.

regional agreements can facilitate the integration of world economies by opening the borders to the trade development while accelerating technological changes and maintaining the economic growth. trade potential is defined as the trade that could be achieved at an optimum trade frontier with the open and frictionless trade possible through regional agreements based on the current level of trade...