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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/17901| Title: | The Distance Puzzle: On the Interpretation of the Distance Coefficient in Gravity Equations |
| Keywords: | F21 F0 ddc:330 distance coefficients gravity equations globalization Gravitationsmodell Schätztheorie Internationale Wirtschaftsbeziehungen Räumliche Verteilung Globalisierung Theorie Deutschland Distanz |
| Issue Date: | 16-Oct-2013 |
| Publisher: | Kiel Institute for the World Economy (IfW) Kiel |
| Description: | Globalization seems to have diminished the importance of geographical distance. However, empirical studies find that distance coefficients in gravity equations change little over time. This paper argues that changes in distance coefficients do not carry much information on changes in distance costs over time. Changes in distance costs are to a large extent picked up solely in the constant term of gravity models. The distance coefficient instead measures the relative difference between far way and close countries. A proportional fall in distance costs that leads to a proportional increase in economic activity would be consistent with constant distance coefficients. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/17901 |
| Other Identifiers: | http://hdl.handle.net/10419/17901 ppn:363645829 |
| Appears in Collections: | EconStor |
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