The issues of zero trade observations and the validity of the log linear transformation of the gravity equation have generated a number of debates in the literature with differing claims about the most suitable estimation technique. To produce unbiased and consistent estimates for policy making,...

This paper presents a theoretical gravity model of trade in which foreign aid is considered as a transfer instead of being part of the trade cost, as it has been previously done in the related literature. We argue that the usual specification leads to invalid out-of-sample predictions, biased...

This paper estimates a gravity model of trade to evaluate the trade effects of the Euro on sectoral trade within the Euro Zone, the CFA Franc Zone and between the Eurozone and the CFA Franc Zone, when CFA countries acquired fixed rates against the non-francophone Eurozone members. The formation...

This paper is the first to explore the links between exporting and importing activities of Egyptian firms using panel data over the period from 2003 to 2007. The main aim is twofold. Firstly, the authors report regression results indicating that firms that both export and import are the most...

This paper focuses on the 2004 enlargement of the European Union to the East and treats it as a natural experiment to investigate two issues: first, whether there has been a trade creation effect in final and intermediate goods and second, to what extent this effect has been more pronounced for...

This paper is the first to estimate the effect of two international agreements (Rotterdam Convention, RC, and the Stockholm Convention, SC) in reducing trade in hazardous substances. We estimate the effects of ratification of these agreements on imports of the affected products putting emphasis...

This study is the first to estimate a system of simultaneous gravity equations for Chinese exports, imports and foreign direct investment (FDI) using a sample of 167 countries over the period 2003-2012. The main results indicate that trade and outward FDI are complementary. In particular, the...

The empirical evidence that institutional differences across countries affect bilateral trade is robust. The crucial question remains how countries can enhance trade amid these differences. In this paper, we measure the degree to which governance and institutions differ between countries as...

Innovation and export decisions are closely interlinked. Both activities contribute to firm performance in various ways: exporting provides a wider market to sell products, while innovation provides new and better products to supply those markets and/or more efficient ways to reduce costs. The...

This paper examines the involvement of the CEECs into regional and global production networks over the period 1999 to 2009. We employ a theoretically justified gravity model which incorporates the extensive margin of trade and accounts for firm heterogeneity. We first estimate the model for...