ECOWAS ülkelerine gravite modelinin uygulanması

This thesis examined the theoretical foundations of the gravitational equation, its specifications and different econometric approaches for its estimation. We adopt Anderson and Van Wincoop (2003) specification to see the effects of GDP, distance and population variables on the trade flow of ECOWAS countries. After substitution of the multilateral resistance effect by unilateral individual effects or remoteness indices, and the zero trade flows by bilateral effects, we show that the PPML method and the Heckman selection procedure remain the most efficient because they give us unbiased estimators and relatively high explanatory power. However, from the point of view of estimation by cointegration techniques, the results are similar to PPML estimation and the Heckman selection procedure and are both consistent with the theory. They only differ in predicting the level of development of ECOWAS countries. By using the Heckman estimation method to take into effects of qualitative variables such as the common border, common language and sharing a monetary union, we found that they may play a role in increasing the volume of trade in ECOWAS countries, while transport cost reduce it. Keywords: Gravity model, Panel data methods, Cointegration, ECOWAS, Zero trade flow, PPML method, Heckman selection procedure