Investor Presentaiton
The Model.
The variables are explained as follow:
In(Xij) denoted natural log of total trade it includes net exports and imports of country i to country j in the US $. Independent variables are:
GDPijt
the log of GDP of i country and j in US$.
PCGDPijt
is the log of the Per Capita GDP Differential between i country and j in US$.
In TRGDPijt
is the log of Trade as a percentage of GDP between country i and j
REMOTEijt is the assessment of the remoteness between country i and j.
LANGijt is common language between country i to country j (dummy variable).
RTA is regional trading agreement (dummy variable)
InPOPijt is the log of Population of country i and country j
And "&" is the error term and "t" denotes time duration whereas' ẞs are the parameters.
REMOTE =
distij
Σ GDPj
GDPW
a formula that measures a country's average weighted distance from its trading partners (Head, 2003), where weights are the partner countries' shares of world GDP (denoted by GDPW).View entire presentation