Examination of foreign trade of Eurasia Economic Union countries with gravity models

The gravity model is named after Newton's "law of gravity". This model is the gravitational resistance between the two masses, proportional to the size of the masses and inversely proportional to the square of the distance between them. Gravity Model, which we encounter intensely in the literature in the modeling and analysis of international trade, is used as an important tool in examining the effectiveness of foreign trade. For the first time, the Gravity model was adapted to social sciences by H. Carey in the 19th century. In the 1960's, the model was applied to interstate trade flows. In the application of this model in foreign trade, the trade volume between the two countries varies in direct proportion to the national income of the countries and inversely proportional to the distance between them. In this study, the attraction model was applied on the foreign trade (export, import) of the Eurasian Economic Union (EAEU). The models were examined with 13 trading main partners and using 12 data sets covering the period from 2010 to 2021. The independent variables used are the GDP of the EAEU and other countries, their populations, the distance of the capitals of the countries to Moscow, the crisis, the common border dummy variables. The dependent variables are the foreign trade (exports, imports) of the EAEU. The analysis was performed on a one-way random effects model with only a unit effect and estimated with the Driscoll-Kraay Estimator and Robust, which produced resistant standard errors after basic assumption tests. According to the results of the panel regression model; In the forecast model on EAEU exports, the GDP of the union turned out to be positively marked and significant. The GDP of other countries is meaningless. It was found that the coefficients of the AEB and population variables of other countries are significant and positively marked. The coefficient of the distance variable has the expected negative sign and was found to be significant. The common border has been found to have a significant impact on the EAEU's exports, and more trade is expected between countries with a common border. It was decided that the CRIZ variable was not important and it was left out of the model. According to the model results on the import of EAEU, it has reached its meaningless conclusion. Keywords: Gravity Model, Foreign Trade, Eurasian Economic Union, Panel Data Analysis