Are Economic Distance and Geographic Remoteness Important in Sustainable Trade? Evidence from the Bilateral Trade between China and Kazakhstan
2019
Daeheon Choi | Chune Young Chung | Jason Young
In this study, we investigate sustainable trade between China and Kazakhstan using the gravity model. We find that the distance between the importer and exporter relative to the distance to other trading partners, rather than the absolute distance, significantly negatively impacts trade volumes. Other factors, such as the structure and availability of free trade zones and unobservable factors related to the characteristics of the checkpoints, also affect trade volumes. To obtain these results, we derive an extended gravity model that considers spatial effects and specific features of the trade between China and Kazakhstan. Thus, we contribute to the fundamental foundations of gravity models.
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