Analysis of the Gravity Model of Mutual and Foreign Trade of the EEU Member Countries

Student: Zhadigerova Almira

Educational Programme: Applied Economics (Master)

Year of Graduation: 2018

The work analyzed the gravity model of trade for the countries of the Eurasian Economic Union (EEU), as well as India, China and the United States. An attempt was made to determine the significance of participation in the EEU alliance using two methods of OLS and Poisson. The model included fixed time effects, pairs of countries, exporters, importers and their various combinations (8 in total), which, according to the preliminary hypothesis, can take into account the unobservable heterogeneity of the data and show more adequate estimates. The results showed that participation in the EEU has a positive effect, and considering the various fixed effects, it is possible to get good estimates even with the usual OLS, but in general Poisson regression is more suitable for estimating foreign trade using a gravity model.

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