An Evaluation of Gravity Model on Free Trade Agreements between Taiwan and Central America

• Main Authors: Gabriel Efrain Rivas Calero, 何楷柏
• Other Authors: Li-Fen Lei
• Format: Others
• Language: en_US
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/75792492957839719882

碩士 === 國立臺灣大學 === 農業經濟學研究所 === 101 === This thesis attempts to evaluate the use of the gravity model of trade on five countries of Central America region which have signed a Free Trade Agreements (FTA) with the Republic of China, Taiwan, which are: Guatemala, El Salvador, Honduras, Nicaragua and Panama, during the period 2000-2012. This study explores the use of the Gravity model to analyze trade flows between these regions. The independent variables analyzed are Gross Domestic Product (GDP), geographical distance, Gross National Income (GNI) per capita and a Free Trade Agreements (FTA) dummy variable as determinants of the amounts traded. It is also analyzed the variable Total Imports as a dependent variable of the gravity equation. Estimates indicate that even though results are not conclusive and favorable with the use of the Gravity Model specification, it generates insights for future studies and is a good attempt to understand trade flows between these two regions given the increasing role of Asia in the world trade, particularly for the Central America region. It is also examined the preferences in each agreement, particularly those obtained in the agricultural sector where the Central American countries obtained very important and convenient preferences, although these are not exploited enough.