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《The determinants of East Asian trade flows》.pdf
Journal of Asian Economics 14 (2003) 695–711 The determinants of East Asian trade flows: a gravity equation approach a a,b,* Carlo Filippini , Vasco Molini aISESAO, Bocconi University, Via Gobbi 5, 20123 Milan, Italy b University of Florence, Florence, Italy Abstract Our paper is an attempt to use the gravity equation model to analyze trade flows between East Asian industrializing countries (including China) and some developed countries in order to show the surprising trade performance of East Asian countries in the last 30 years. We modify the model, introducing a new variable, the technological distance, in order to understand the relevance of the technological gap between countries in the determination of trade flows. The model is augmented by some dummy variables to capture the specific propensities to export/ import of some regions (East Asia, China) and these dummies are interacted with time dummies and the technological distance. The purpose is to understand the dynamics of East Asian industrializing countries across sub-periods and to measure the impact of technological distance on trade flows. Latin America experience is compared to Asian one. The paper is divided as following. The first paragraph analyses the trade performance of East Asian economies and their increasing role in the world economy, the second presents a qualitative overview of the gravity equation, the third is about the model identification and our hypothesis, the fourth and the fifth are about the estimated equation and the dataset used and Finally, the econometric results are presented in the sixth. # 2003 Elsevier Inc. All rights reserved.
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