Preliminary communication
https://doi.org/10.17818/DIEM/2021/1.10
DETERMINANTS OF THE BILATERAL TRADE FLOWS OF NORTH MACEDONIA– A GRAVITY MODEL APPROACH
Irena Kikerkova
orcid.org/0000-0002-8394-8504
; Faculty of Economics, Ss. Cyril and Methodius University, Republic of North Macedonia
Elena Makrevska Disoska
orcid.org/0000-0002-7245-4250
; Faculty of Economics, Ss. Cyril and Methodius University, Republic of North Macedonia
Katerina Toshevska-Trpchevska
orcid.org/0000-0001-5778-7105
; Faculty of Economics, Ss. Cyril and Methodius University, Republic of North Macedonia
Jasna Tonovska
; Faculty of Economics, Ss. Cyril and Methodius University, Republic of North Macedonia
Abstract
The paper makes an indetail overview of the structure of the trade exchange of goods of Macedonia and explores the determinants of its bilateral trade flows using the gravity model. The analysis includes data on 40 trade partners of Macedonia in the period from 2005-2019. The used variables in the model are: GDP per capita difference, population, distance and relative endowments of factors of production (capital, land and labour). In most of the analyzed regressions the coefficients on determinants such as GDP per capita difference and population are positive and their impact upon the bilateral trade (as dependent variable) is statistically significant. Intensity of Macedonian trade decreases in regard of the distance from a trade partner and increases in partner’s size – the country tends to trade more with lager countries. In our analysis we included three dummy variables such as: membership in the EU and in CEFTA-2006 and common language. The impact of the possible membership in the EU is clearly positive and statistically significant. Being a candidate country for full EU membership, Macedonia trades more with EU trade partners rather than with the neibouring countries, members of CEFTA-2006.
Keywords
bilateral trade; gravity model; trade partners; Republic of North Macedonia; European Union; CEFTA-2006
Hrčak ID:
261897
URI
Publication date:
7.9.2021.
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