Work detail

Observing Globalization using the Gravity Model of Trade

Author: Mgr. Adam Dobiáš
Year: 2016 - summer
Leaders: Mgr. Michal Paulus
Consultants:
Work type: Finance, Financial Markets and Banking
Masters
Language: English
Pages: 96
Awards and prizes:
Link: https://is.cuni.cz/webapps/zzp/detail/150721/
Abstract: This thesis investigates application of the gravity model of international trade on measuring a distance
coefficient, which is known to be a proxy to globalization. This estimation is performed on a dataset
containing information on EU 27 countries through the years 1996 to 2014. The presence of 10 postcommunist
countries enabled the author to perform the estimation on transformative economies, which
had been isolated from their western trade partners for over 40 years. The division of the dataset into the
Western and Eastern Blocs enabled measurement of convergence of the intra-blocs trade – the second
goal of this thesis. This measurement was done through newly introduced intra-blocs trade variables that
enabled measurements of both directions of trade. Through the application of this model on 10 sections,
these measurements could be performed on single trade components. The analysis shows a substantial
heterogeneity between single sections both in distance coefficient and inter-blocs trade. An increase in
the level of globalization was observed in 9 out of 10 sections and convergence of some sections
between the blocs was also found. Finally, globalization was found to progress with varying speed
within single SITC sections during periods of economic crises.
August 2020
MonTueWedThuFriSatSun
     12
34

56789
10111213141516
17181920212223
24252627282930
31      

Partners

Deloitte

Sponsors

CRIF
McKinsey
Patria Finance