The gravity equation in international trade in services

Fukunari Kimura, Hyun Hoon Lee

Research output: Contribution to journalArticle

167 Citations (Scopus)

Abstract

The main purpose of this paper is to assess the impact of various factors on bilateral services trade, relative to that on bilateral goods trade. To accomplish this purpose, using the standard gravity model, we ran regressions on bilateral services trade and goods trade between 10 OECD member countries and other economies (including OECD member and nonmember countries) for the years 1999 and 2000. One main and interesting result is that services trade is better predicted by gravity equations than goods trade. Another interesting result is that there is a complementary relationship between goods exports and services imports.

Original languageEnglish
Pages (from-to)92-121
Number of pages30
JournalReview of World Economics
Volume142
Issue number1
DOIs
Publication statusPublished - 2006 Apr 1

Keywords

  • Economic freedom
  • Gravity model
  • Trade in goods
  • Trade in services

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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