The Gravity Model between Malaysia and selected EU countries

This study applied the Gravity Model to estimate the factors influence the trade and assess the trade potential between Malaysia and selected major trading partners of the EU countries. The model was estimated with a sample of five selected EU countries: Germany, United Kingdom, Netherlands, Belgiu...

Full description

Saved in:

Bibliographic Details
Main Author:	Nurul Humaira’ Aishah, Mohd Ali
Format:	Thesis
Language:	eng eng
Published:	2015
Subjects:	HB Economic Theory HG Finance
Online Access:	https://etd.uum.edu.my/4952/1/s816022.pdf https://etd.uum.edu.my/4952/2/s816022_abstract.pdf
Tags:	Add Tag No Tags, Be the first to tag this record!

id	my-uum-etd.4952
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Baharudin, Amir Hussin
topic	HB Economic Theory HG Finance
spellingShingle	HB Economic Theory HG Finance Nurul Humaira’ Aishah, Mohd Ali The Gravity Model between Malaysia and selected EU countries
description	This study applied the Gravity Model to estimate the factors influence the trade and assess the trade potential between Malaysia and selected major trading partners of the EU countries. The model was estimated with a sample of five selected EU countries: Germany, United Kingdom, Netherlands, Belgium and France. A panel data analysis was used to disentangle the time invariant country-specific effect, and to capture the relationship between the relevant variables across time. The findings showed that the random effect was preferred over the fixed effect specification in the Gravity Model. Additionally, the variables, namely the gross domestic product, gross domestic products per capita, distance, and exchange rate were found to be the significant determinants in the bilateral trade flows. The trade potential is also found yet to be explored fully. Based on these findings, various policy implications and recommendations are suggested
format	Thesis
qualification_name	masters
qualification_level	Master's degree
author	Nurul Humaira’ Aishah, Mohd Ali
author_facet	Nurul Humaira’ Aishah, Mohd Ali
author_sort	Nurul Humaira’ Aishah, Mohd Ali
title	The Gravity Model between Malaysia and selected EU countries
title_short	The Gravity Model between Malaysia and selected EU countries
title_full	The Gravity Model between Malaysia and selected EU countries
title_fullStr	The Gravity Model between Malaysia and selected EU countries
title_full_unstemmed	The Gravity Model between Malaysia and selected EU countries
title_sort	gravity model between malaysia and selected eu countries
granting_institution	Universiti Utara Malaysia
granting_department	Othman Yeop Abdullah Graduate School of Business
publishDate	2015
url	https://etd.uum.edu.my/4952/1/s816022.pdf https://etd.uum.edu.my/4952/2/s816022_abstract.pdf
_version_	1747827833810452480
spelling	my-uum-etd.49522021-04-04T08:53:06Z The Gravity Model between Malaysia and selected EU countries 2015 Nurul Humaira’ Aishah, Mohd Ali Baharudin, Amir Hussin Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HB Economic Theory HG Finance This study applied the Gravity Model to estimate the factors influence the trade and assess the trade potential between Malaysia and selected major trading partners of the EU countries. The model was estimated with a sample of five selected EU countries: Germany, United Kingdom, Netherlands, Belgium and France. A panel data analysis was used to disentangle the time invariant country-specific effect, and to capture the relationship between the relevant variables across time. The findings showed that the random effect was preferred over the fixed effect specification in the Gravity Model. Additionally, the variables, namely the gross domestic product, gross domestic products per capita, distance, and exchange rate were found to be the significant determinants in the bilateral trade flows. The trade potential is also found yet to be explored fully. Based on these findings, various policy implications and recommendations are suggested 2015 Thesis https://etd.uum.edu.my/4952/ https://etd.uum.edu.my/4952/1/s816022.pdf text eng public https://etd.uum.edu.my/4952/2/s816022_abstract.pdf text eng public masters masters Universiti Utara Malaysia Abu Bakar, Nor’Aznin, Zainal Abidin, Irwan Shah and Haseeb. M., (2015). Investigating Exports Performance between Malaysia and OIC Member Countries from 1997-2012. Asian Social Science; Vol. 11. No. 7; 2015. Anaman, K. A and Al-Kharusi (2013). Analysis of trade flows between Brunei Darussalam and the European Union, ASEAN Economic Bulletin, vol.20,no. 1, p.60-73. Anderson, J. E. (1979), “A Theoretical Foundation for the Gravity Equation”, The American Economics 69 (1), 106-116. Balassa, B (1996), “Tariff Reductions and trade in Manufactures among Industrial Countries”, American Economic Review, 56(3), 466-473. Balassa, B. and Bauween, L. (1987), “ Intra-Industry Specialization in Multi-Country and Multi-Industry Framework”, The Economic Journal, 923-939. Baltagi, B.H (1995). Econometric analysis of panel data, Chichester, Wiley, England. Baltagi, B.H., Egger, P., and Pfaffermayr, M. (2003), “A Generalized Design for Bilateral Trade Flow Models”, Economics Letters, 80, 319-7. Bergstrand, J.H (1985). The gravity equation in international trade: some microeconomics foundations and empirical evidence , The Review of Economics and Statistics, vol 67, p. 474-81. Blomqvist, H.C (2004). Explaining trade flows in Singapore, ASEAN Economic Journal, vol. 18, no.1, p.25-46. Caves, E. (1981), “Intra-Industry Trade an Market Structure in Industrial Countries”, Oxford Economics Papers, 203-223. Clark, D, and Stanley, D. (2003), “Determinants of Intra-Industry Trade Between the United States and Industrial Nations”, International Economic Journal 17(3), 1-17. Dilawar. K., Ihtisham. U.H., Shaista. K., (2013). An Empirical Analysis of Pakistan’s Bilateral Trade: A Gravity Model Approach. The Romanian Economic Journal, Year XVI no. 48. Deardoff, A.V (1998). Determinant of bilateral trade: does gravity model work n neoclassical world? Discuss paper, No, 382, University of Michigan, p.1-27. Drabble, John, “The Economic History of Malaysia”. EH.Net Encyclopedia, edited by Robert Whaples. (2004, July 30). Retrieved from http://eh.net/encyclopedia/economic-history-of malaysia/. Drabble, J.H. An Economic History of Malaysia, c.1800-1990: The Transition to Modern Economic Growth. Basingstoke: Macmillan and New York: St. Martin’s Press, 2000. Eaton.J and Korton.S (1997). Technology and bilateral trade, NBER working paper, No 6253, Cambridge, MA, National Bureau of Economic Research, p.1-53. Economic Planning Unit. (2006). “Prime Minister’s Department. Ninth Malaysia Plan, 2006-2010.” Kuala Lumpur: Government Printers. Economic Planning Unit. (2011). “Prime Minister’s Department. Tenth Malaysia Plan, 2011-2015.” Kuala Lumpur: Government Printers. Egger, P. (2002). An econometric view on the estimation of gravity models and the calculation of trade potentials, World Economy, vol. 25, iss. 2. P. 297-312. Eichengreen, B. and Irwin D. (1998), “ The Role of Histroy in Bilateral Flows”, The Regionalisation of the World Economy in Jeffrey A. Frankel (ed), University of Chicago, Press. Evans, E., and Harrigan, J. (2005), “Distance Time, and Specialization: Learn Retailing in General Equilibrium”, American Economic Review 95(1): 292-313. Frankel, J., and Rose, A., (1998), “The Endogeneity of the Optimum Currency Area Criteria”, The Economic Journal 108, 1009-1025. Faustino, H., and Leitao N.C. (2007), “Intra-Industry trade: A static and Dynamic Panel data Analysis”, International Advances in Economic Research, 13(3), 313-333. Gullick, J.M (1989), Malay Society in the Late Nineteenth Century. Kuala Lumpur: Oxford University Press. Gujarati, D.N (2003). Basic Econometrics, 4:e upplagan, New York, Mc Graw-Hill Higher Education. Helpman, E., and Krugman, P. (1985), “ Market Structre and Foreign Trade”, Brighton, UK: Harvester Wheatsheaf. Helpma, E. (1987), “Imperfect Competition and Internationa Trade: Evidence from fourteen Indusrial Countries”, Journal of Japononese International and International Economics, 1(1), 62-81. Historical Background (2012, March 29) sources from Information Malaysia 1997 Yearbook. Retrieved from http://mymalaysia.net.my/knowmsia/historicalbackground/. Importance of International Trade. Retrieved from http://www.moneyinstructor.com/doc/international trade.asp. Lucas, R. Jr. (1998), “ On the Mechanics of Economic Development”, Journal of Monetary Economics, 22 (1), 3-42. Luca. D.B., and Daria T., (2011), The Gravity Model in International Trade. From the selected works or Luca De Benedictis. Liang. H.S., Jefri A.G., Zuraidi. J., William. C., (2008). A STUDY OF THE TRADE PERFORMANCE OF MALAYSIA AND ITS MAJOR TRADING PARTNERS. By Assistant Director of External Trade Statistics Division, Department of Statistics Malaysia. Jakab, Z.M, Kovacs, M. A , Oszlay, A. (2001) , How far has trade integration advance? An analysis of actual and potential trade of the three central and Eastern European countries, Journal of Comparative Economics,vol. 29, p.276-292. Krugman, P.R., and Maurice, O. (2005), International economics: theory and policy, 7.ed, Boston, Addison-Wesley. Malaysia, Belgium To intensify Cooperation in SME sector (2011). SME Cooperation Forum. Retrieved from http://www.globalsmes.org/news/index.php?func= detail&lan=en&detailid=942&catalog=03. Malaysia’s trading nation status remains, (2012, July 23) The Star Online. Retrieved fromhttp://www.thestar.com.my/Story/?file=%2F 2012%2F7%2F23%2Fbusiness%2F11702213. Malaysia’s Economic History: 1920-1941. Retrieved from http://www.icapitaleducation.biz/index.php? section=5&sub=16. Malacca : WHERE IT ALL BEGAN. Retrieved from http://www.geographia.com/malay sia/malhistory.html. Martinez-Zarzoso, Nowak-Lehman, Felicitas, D. (2004), Economic and geographical distance: explaining Mercosure sectoral exports to the EU, Open Economies Review, vol. 15, issue 3, p. 291-314. Matyas, L., Konya, L., Harris, M.N, (1997), Modelling export activity in a multicountry economic area: the APEC case, Monash Econometrics and Business Statistic Working paper: 1/97. Markusen, J.R. (1984), “Multinational, Multi-Plant Economies, and the Gains from trade”, Journal of International Economics, 16, 2005-226. Maria. C., and Luca. S., (2013). Hands-on gravity estimation with Stata. African Growth and Development policy Modelling consortium (AGRODEP). Mohammed B. Yusoff (2009). Bilateral Trade Balance, Exchange Rates, and Income: Evidence from Malaysia. Global Economy Journal, Volume 9, Issue 4. Montanari, M (2005), EU trade with Balkans, large room for growth? Eastern European Economics, vol. 43, no 1, p.59-81. Lindert, P.H, (1991), International Economics, 9.ed., Homewood, Irwin. Pagoulatos, E., and Sorense, R. (1975), “Two-Way International Trade: New Econometric Analysis”, Weltwirlscgafiliches Archiv (3), 454-465. Tinbergen J (1962, “Shaping the World Economy”, New York: The Twentieth Century Fund Inc. THOMAS WHITE INTERNATIONAL, (n.d) Malaysia: Manufacturing Drives Growth. Retrieved from http://www.thomaswhite.com/world-markets/malay sia-manufacturing-drives-growth/. THE WORLD BANK DATA, (n.d) Data indicator. Retrieved from http://data.worldbank.org/. Tom. G. (2003), The Complete Idiot’s Guide to Economic. Retrieved from http://www.infoplease.com/cig/economics/ three-economists-their-theories.html. Toh, K. (1982), “ A Cross-Section Analysis of Intra-Industry Trade in U.S Manufacturing Industries”, Weltwirltschafiliches Archiv (118), 281-301. The Malaysia- Germany Bussiness Forum, (2005, May 17). Koleksi Arkib Ucapan Ketua Esekutif. Retrieved from http://www.pmo. gov.my/ucapan/?m=p&p=paklah&id=2949. UK-Malaysia joint statement, (2011, July 14). The Commonwealth, Foreign affairs, International and Development and Malaysia. Retrieved from https://www.gov.uk/government/ news/uk-malaysia-joint-statement. Lisa S. (2013, October 04). Adam Smith: The Father Of Economics. Retrieved from http://www.investopedia.com/articles/economics/ 08/adam-smith-economics.asp. Malaysia. (2004). Economic Report 2004/05. Retrieved from http://www/treasury.gov.my. Economic Planning Unit. (1985). “Prime Minister’s Department. Fourth Malaysia Plan, 1985-1990.” Kuala Lumpur: Government Printers. European Coal and Steel Community (ECSC), (2014, May 25). Written by The editors of Encyclopedia Britannica. Retrieved from http://www.britannica.com/ EBchecked/topic/196004/European-Coal-and-Steel- Community-ECSC. Malaysia. (2009). Economic Report 2009/10. Retrieved from http://www/treasury.gov.my. Trade Openess of Malaysia Economy (2010). Asia regional integration center based on direction of trade statistics and World Economic Outlook, International Monetary Fund. Yussof, Mohammed B (2005). Malaysia bilateral trade relations and economics growth, International Journal of Business and Society.

The Gravity Model between Malaysia and selected EU countries

Similar Items