Proceedings of 7th Annual American Business Research Conference
23 - 24 July 2015, Sheraton LaGuardia East Hotel, New York, USA, ISBN: 978-1-922069-79-5
Gravity Models for Emerging Markets
Selçuk Koçi, Selcan Kapkaraii and Mehmet Çağrı Gözeniii
In the acute global competition environment, emerging markets increasing their
competitiveness day by day draw attention due to their different structure from other
developed and developing countries. Countries are called emerging markets when
they increase GDP per capita after these countries decide to make long term plans
and implementing these plans to remove unequal income distribution problem, to
overcome excess population problem and to strenghten poor industrial and social
infrastructure. This study aims to explain international trade of emerging markets with
each other by using gravity model and panel data analysis methods. To this end,
basic gravity model will be analyzed for the 1990-2013 period with panel data
methods. For this purpose, dependent variable of the model is determined as export
of emerging markets and independent variables are determined as distance of capital
cities of emerging markets, economic growth rates of these economies and
populations. With the help of the model, effect of independent variables on export
performance of emerging markets with each other such as direction and level of
export will be analyzed. Empirical findings will be compared with the basic gravity
model assumptions and it is decided whether model explains international trade of
emerging markets or not.
Keywords: Gravity Models, Emerging Markets, Panel Data, Export.
JEL: F18, C23
i
Kocaeli University, Department of Economics: selcukkoc@kocaeli.edu.tr
Kocaeli University, Department of Economics: skapkara@hotmail.com
iii
Kocaeli University, Department of Economics: cagri.gozen@gmail.com
ii