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Revista Economía y Política
On-line version ISSN 2477-9075
Abstract
TONON ORDONEZ, Luis B.; PINOS LUZURIAGA, Luis G.; ALBORNOZ FLORES, Ana C. and GARCIA FLORES, Paulo E.. Income elasticity of bilateral trade through the Gravitational Model. Case Ecuador. Revista Economía y Política [online]. 2019, n.30, pp.131-152. Epub July 03, 2019. ISSN 2477-9075.
This study determines the statistical importance of the Gross Domestic Product in the trade flow of Ecuador with 19 trading partners of the American continent and obtains the income elasticity of bilateral trade flows based on the gravity model of foreign trade, in terms of the size (mass) of the economies they trade with and the distance between them. For this work, databases were structured with the nominal GDP of each country and the trade flows expressed in FOB values, in U.S. dollars, and the distances in kilometers between the capitals. For the calculation of elasticities, a Panel Data model with random effects was applied to obtain the respective coefficients.
Keywords : Gravity model; bilateral trade; Ecuador; income elasticity; Gross Domestic Product; Random Effects Panel Data.