A gravity model analysis for trade between the GCC and developed countries

Figures & data

Figure 1. Selected Developed Countries.

Table 1. Variables, Definitions, and Data Sources

Variables	Definitions
Tradeij	Total ratio of bilateral trade (exports + imports) between the source and destination countries.
Ln Tradeij	Total ratio of bilateral trade (exports + imports) between the source and destination countries, in natural logarithm form.
Exportsij	Total exports from source to destination countries.
Ln Exportsij	Total exports from source to destination countries, in natural logarithm form.
Importsij	Total imports from destination to source countries.
Ln Importsij	Total imports from destination to source countries, in natural logarithm form.
GDPpci	Real GDP per capita (constant 2005US) in sources country i.
Ln GDPpci	Real GDP per capita (constant 2005US) in sources country i, in natural logarithm form.
GDPpcj	Real GDP per capita (constant 2005US) in host country j.
Ln GDPpcj	Real GDP per capita (constant 2005US) in host country j, in natural logarithm form.
POPi	Population in sources country i.
Ln POPi	Population in sources country i, in natural logarithm form.
POPj	Population in host country j.
Ln POP	Population in host country j, in natural logarithm form.
DISTij	The geographical distances (miles) between the source and host countries.
Ln DISTij	The geographical distances (miles) between the source and host countries in natural logarithm form.

Table 2. Summary Statistics on the bilateral trade, bilateral exports, bilateral imports, and the Gravity Model

Variables	Mean	Std. Dev	Min	Max
Tradeij	6.86e+09	1.18e+10	1.13e+07	7.04e+10
Ln Tradeij	21.34	1.82	16.24	24.97
Exportsij	4.33e+09	9.53e+09	193,006	5.18e+10
Ln Exportsij	19.74	2.77	12.17	24.67
Importsij	2.53e+09	3.85e+09	8,194,220	2.48e+10
Ln Importsij	20.73	1.52	15.91	23.93
GDPpci	36,056.3	19,181.83	14,232.22	74,448.88
Ln GDPpci	10.35	0.53	9.56	11.21
GDPpcj	42,660.85	4717.50	30,440.63	53,421.2
Ln GDPpcj	10.65	0.11	10.32	10.88
POPi	6,509,853	8,857,762	613,720	2.95e+07
Ln POPi	14.96	1.13	13.32	17.19
POPj	1.17e+09	9.84e+07	3,880,500	3.14e+08
Variables	Mean	Std. Dev	Min	Max
Ln POPj	18.10	1.17	15.17	19.56
DISTij	6600.87	3656.35	2756.08	14,890.02
Ln DISTij	8.65	0.51	7.92	9.60

Table 3. Correlation Coefficient Matrix, dependent variable is bilateral trade

	Tradeij	GDPpci	GDPpcj	POPi	POPi	DISTij
Tradeij	1
GDPpci	−0.03	1
GDPpcj	0.18	0.05	1
POPi	0.49	−0.42	−0.10	1
POPi	0.30	0.02	0.52	−0.01	1
DISTij	−0.09	−0.11	0.10	0.13	0.30	1

Table 4. Correlation Coefficient Matrix, dependent variable is bilateral exports

	Exportsij	GDPpci	GDPpcj	POPi	POPi	DISTij
Exportsij	1
GDPpci	−0.03	1
GDPpcj	0.14	0.05	1
POPi	0.43	−0.42	−0.10	1
POPi	0.24	0.02	0.52	−0.01	1
DISTij	−0.14	−0.11	0.10	0.13	0.30	1

Table 5. Correlation Coefficient Matrix, dependent variable is bilateral imports

	Importsij	GDPpci	GDPpcj	POPi	POPi	DISTij
Importsij	1
GDPpci	−0.02	1
GDPpcj	0.23	0.05	1
POPi	0.47	−0.42	−0.10	1
POPi	0.34	0.02	0.52	−0.01	1
DISTij	0.05	−0.11	0.10	0.13	0.30	1

Table 6. Gravity Equations, dependent variable is bilateral trade, Panel Analysis 2001–2012

Regressor	RE (GLS)	OLS
Ln GDPpci	1.194*** (0.000)	1.230*** (0.000)
Ln GDPpcj	3.280*** (0.000)	−0.281 (0.546)
Ln POPi	1.471*** (0.000)	1.181*** (0.000)
Ln POPj	0.852*** (0.000)	0.926*** (0.000)
Ln DISTij	−0.725** (0.036)	−0.556*** (0.000)
CONSTANT	−57.147*** (0.000)	−18.024*** (0.000)
N. Observations	360	360
N. groups	30	30
F test		419.80*** (0.0000)
Wald Chi2	509.03*** (0.0000)
R^2(within) R^2(between) R^2(overall)	0.7526 0.8149 0.8051	0.8447

p-value in parentheses, *significant at 10%, **significant at 5%, ***significant at 1%

Table 7. Gravity Equations, dependent variable is bilateral exports, Panel Analysis 2001–2012

Regressor	RE (GLS)	OLS
Ln GDPpci	2.180*** (0.000)	1.111*** (0.000)
Ln GDPpcj	−1.700 (0.445)	−0.4.285*** (0.000)
Ln POPi	2.206*** (0.000)	1.487*** (0.000)
Ln POPj	1.379*** (0.000)	1.510*** (0.000)
Ln DISTij	−0.416 (0.549)	−0.269 (0.115)
CONSTANT	−39.091*** (0.002)	6.628 (0.507)
N. Observations	360	360
N. groups	30	30
F test		153.74*** (0.0000)
Wald Chi2	88.19*** (0.0000)
R^2(within) R^2(between) R^2(overall)	0.4717 0.6221 0.6046	0.6478

p-value in parentheses, *significant at 10%, **significant at 5%, ***significant at 1%

Table 8. Gravity Equations, dependent variable is bilateral imports, Panel Analysis 2001–2012

Regressor	RE (GLS)	OLS
Ln GDPpci	0.832*** (0.000)	1.069*** (0.000)
Ln GDPpcj	4.190*** (0.000)	0.289 (0.468)
Ln POPi	1.180*** (0.000)	1.017*** (0.000)
Ln POPj	0.651*** (0.000)	0.752*** (0.000)
Ln DISTij	−0.408* (0.096)	−0.231*** (0.000)
CONSTANT	−58.453*** (0.000)	−20.266*** (0.000)
N. Observations	360	360
N. groups	30	30
F test		499.35*** (0.0000)
Wald Chi2	579.85*** (0.0000)
R^2(within) R^2(between) R^2(overall)	0.6913 0.8095 0.7876	0.8498

p-value in parentheses, *significant at 10%, **significant at 5%, ***significant at 1%