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Coefficients on Distance and Common Border: BLINK versus No BLINK

Coefficients on Distance and Common Border: BLINK versus No BLINK

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Gravity models have been extensively used as workhorse models to study the determinants of international trade. While most of the literature has focused on trade in manufacturing, a recent literature has emerged that uses gravity models to study international trade in services. Despite showing that gravity equations are well suited to studying trad...

Contexts in source publication

Context 1
... Tables 7 and 9 we observe that, with virtual proximity present as a regressor, the marginal impacts of distance, common border, and common language on trade in both services and manufacturing become smaller in magnitude. This is illustrated in Figure 7 for distance and common border. ...
Context 2
... an increasing flow of information between countries through the internet, we may infer from Figure 7(a) that there is no distance puzzle since the partial effect of distance has indeed decreased. The process has presumably begun much before 2009. ...

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