Augmented Gravity Model of Trade with Social Network Analysis

The 2030 Agenda for Sustainable Development recognizes international trade as an engine inclusive economic growth and poverty reduction, important means to achieve the sustainable development goals (SDGs). Given this role, global networks have received preeminent attention in recent times due sharp volumes their contributions reduction over years. Despite associated benefits, there are worrying concerns about unprecedented changes patterns growing imbalances times. Whereas China’s more than tripled decades maintained largest surplus spot ahead of Germany, other major countries such Japan, USA, etc., become deficit with increasing at a much slower pace. In view need understand dynamics widening among trading partners, paper investigates factors that determine export performance countries. More specifically, purpose is highlight forces using augmented gravity model includes social networks. provides useful insights into underlying currents responsible patterns. Using data from 51 41 years, our results indicate GDP both home country partner affects country’s exports positively. Similarly, real effective exchange rate REER, openness OPEN, dummy variables BORDER, ENGLISH, EU produced positive statistically significant coefficient estimates, these line theoretical expectations.