The gravity equation has been a successful model in explaining international trade between nations. This paper aims to explore the behavior of the key variables across time. With a dataset consisting out of 41 countries and 31 years we find evidence that the coefficients of most variables have changed over time. Among others, we find that the negative distance parameter on trade has increased over time, and that a common language is decreasingly a relevant factor for exports.

Viaene, J.M.A.
hdl.handle.net/2105/11844
Business Economics
Erasmus School of Economics

Handgraaf, R. (2012, August 16). Is gravity constant?: An investigation into key variables of the. Business Economics. Retrieved from http://hdl.handle.net/2105/11844