The Impact of Spatial Interaction Effects Neighboring on Fluctuations of Trade: Spatial Panel data Econometric Method and Wavelet Smoothing

Document Type : Research Paper

Authors

1 Professor of Shahid Chamran University of Ahvaz

2 Ph.D. of Economic

Abstract

The main objective of this study is to evaluate the spatial effect on fluctuations of trade based on the Spatial Panel data Econometric Method and Wavelet Smoothing using bilateral trade weighted matrix. The negative spatial dependent are estimated. Using data from 34 most-important countries the period of 1980-2010 are investigated through Spatial Model and Maximum likelihood Estimation method (ML). So that, an increase by one percent in trade fluctuations in neighboring countries causes 0.62 percent increase in trade fluctuations of each country in the reverse direction, respectively. Evaluation and interpretation of the results of spillovers elasticity of trade fluctuations showed that with the sudden increase in growth rates, prices and GDP of neighboring countries and with a sudden drop in income, the nominal exchange rate, the share of imports of raw and intermediate from total imports and the share of agricultural and food exports of total exports and geographical concentration of neighboring countries, trading will be reduced in the own countries. Comparison of the spatial estimation with standard regression estimates showed that the spatial effects cause OLS model face with the bias.

Keywords

References

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Journal of Economic Research (Tahghighat- E- Eghtesadi)
Volume 50, Issue 4 - Serial Number 4
January 2016
Pages 835-859

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History

  • Receive Date: 15 December 2014
  • Revise Date: 23 July 2015
  • Accept Date: 06 October 2015

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