In this section, I 'll mention some of the most important studies conducted to determine the commercial potential in an economic integration using gravity model. John McCallum, the Canadian economist, and politician has used the gravity model to assess the economic integration of Canada and the United States. He used the dummy variable in his analysis which indicated the interprovincial trade flow between each Canadian province and concluded that the convergence has a positive impact on Canadian domestic trade. It means that U.S.-Canadian trade not only has not decreased Canadian interprovincial trade flow, but also their domestic trade has increased that for more than 20-fold .
Carlos Carrillo-Tudela and Carmen A Li, two university of Essex …show more content…
The purpose of his study is to estimate India 's trade potential using gravity model. The dependent variable in all tests is the total trade (exports + imports). The results show that gravity equation represents the distance and income effect of elasticity of trade flows and measures the geographical factors as well as historical and cultural ties between India and its major trading partners. The results also indicated Asia-Pacific region accounts for maximum trade potential with India. Western Europe, North America, and the Middle East are respectively at the next level. Among those, China, UK, Italy and France have the highest potential trade opportunities to expand their market across India. Amita conducted his study using ordinary least squares (OLS) technique which analysed cross section data for the year 2000 (Batra, …show more content…
Their analysis illustrates China’s excessive orientation toward foreign trade as its major trade policy. They also have predicted China 's future export and import flows using gravity model (Edmonds, Croix, & Li, 2008).
Roy, M. and Rayhan, I. , have also analysed trade flow of Bangladesh, using gravity model. Their analysis depicts an overview of Bangladesh 's trade performance using factors like GDP, the openness of the economy and currency exchange rate. According to their findings, Bangladesh trade positively related to economy size and inversely related to trade restrictions (Roy & Rayhan, 2011). Besides all the above-mentioned researches, some studies have been done by Iranian economists in the same field, some of which are mentioned below:
Gholami, A. , explores the role of trade liberalization policies within the framework of regional trade agreements. He discusses the role of trade liberalization in foreign trade between Iran and other Islamic countries -including 16 trading partners- using imperfect gravity model. The results indicate that, with improving trade policy and removing tariff and non-tariff barriers and eradicate corruption in customs and other trade-related organizations, their trade in the form of regional trade bloc will be expanded (Gholami,
Carlos Carrillo-Tudela and Carmen A Li, two university of Essex …show more content…
The purpose of his study is to estimate India 's trade potential using gravity model. The dependent variable in all tests is the total trade (exports + imports). The results show that gravity equation represents the distance and income effect of elasticity of trade flows and measures the geographical factors as well as historical and cultural ties between India and its major trading partners. The results also indicated Asia-Pacific region accounts for maximum trade potential with India. Western Europe, North America, and the Middle East are respectively at the next level. Among those, China, UK, Italy and France have the highest potential trade opportunities to expand their market across India. Amita conducted his study using ordinary least squares (OLS) technique which analysed cross section data for the year 2000 (Batra, …show more content…
Their analysis illustrates China’s excessive orientation toward foreign trade as its major trade policy. They also have predicted China 's future export and import flows using gravity model (Edmonds, Croix, & Li, 2008).
Roy, M. and Rayhan, I. , have also analysed trade flow of Bangladesh, using gravity model. Their analysis depicts an overview of Bangladesh 's trade performance using factors like GDP, the openness of the economy and currency exchange rate. According to their findings, Bangladesh trade positively related to economy size and inversely related to trade restrictions (Roy & Rayhan, 2011). Besides all the above-mentioned researches, some studies have been done by Iranian economists in the same field, some of which are mentioned below:
Gholami, A. , explores the role of trade liberalization policies within the framework of regional trade agreements. He discusses the role of trade liberalization in foreign trade between Iran and other Islamic countries -including 16 trading partners- using imperfect gravity model. The results indicate that, with improving trade policy and removing tariff and non-tariff barriers and eradicate corruption in customs and other trade-related organizations, their trade in the form of regional trade bloc will be expanded (Gholami,