Impacts of technological gap and economic factors on trade flows of emerging East Asian nations

The paper uses an augmented gravity model to examine trade flows from emerging East Asian nations (including China) to developed countries. A ‘’technological gap’’ variable is constructed and integrated in a gravity model to investigate its impacts on those export flows. Theory in the field of trade and technology suggests that econo-mies should be specialized to exchange reflecting advantages and disadvantages. However, this paper shows that the wider the technological gap is, the less nations trade. In other words, bilateral trade partners will trade more if they have a smaller gap of technological capabilities.