The geography of gravity

Although geography has been considered an important factor in international trade, spatial heterogeneity has not been fully investigated in standard gravity models. This paper contributes to the literature by investigating how gravity works geographically in trade. The geographically weighted regres...

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Bibliographic Details
Published in:	Asia-Pacific journal of accounting & economics Vol. 29; no. 6; pp. 1560 - 1578
Main Authors:	Ko, Jun-Hyung, Matsuzaki, Akeyoshi, Yoo, Dongwoo
Format:	Journal Article
Language:	English
Published:	Routledge 02-11-2022
Subjects:	geographically weighted regression Gravity model spatial heterogeneity
Online Access:	Get full text
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Summary:	Although geography has been considered an important factor in international trade, spatial heterogeneity has not been fully investigated in standard gravity models. This paper contributes to the literature by investigating how gravity works geographically in trade. The geographically weighted regression (GWR) reveals spatial variations in estimated parameters. GWR regression results suggest even though physical distance is the same, economic distance can be different based on the location. Our regression results on the impact of Kyoto protocol show that while a loss of competitiveness is observed among non-European developed countries, no loss of competitiveness is clearly seen in the European Union.
ISSN:	1608-1625 2164-2257
DOI:	10.1080/16081625.2020.1730920