Detail publikace

German International Trade: Interpreting Export Flows According to the Gravity Model

Autor: doc. Ing. Vladimír Benáček CSc.,
Mgr. Eva Michalíková ,
Typ: Submissions
Rok: 2014
Číslo: 0
Publikováno v: IES FSV UK
Místo vydání: IES WP
Klíčová slova: Germany, export, gravity model, fixed effects, random effects, least trimmed squares
JEL kódy: C13, C23, F10, F12, F14
Abstrakt: The paper analyses German exports using gravity model of international trade. We examined not only the determinants of German exports but also the belief that Germany as a European leader can find a way out of the crisis of EU economies. Our panel dataset includes German exports to 176 countries and 22 control variables including institutional factors over the period 1995-2011. We estimated Random Effects model and also Least Trimmed Squares model to control for the heterogeneity between countries. We distinguish two panel data specifications: time-series and cross-section. They allow us to examine long-term and short-term decision horizons. General conclusion of our model is that German exporters are more prone to expand the trade to countries that are more distant from their European neighbourhood than what is the world average. Exports are sensitive to both the real exchange rate movements and the price levels of partner countries, even though their elasticity is significantly less than unity, which suggests that German exports would not be hit too much if Euro appreciated in real terms. The position of Euro in German trade seems to be rather ambiguous since not all tests revealed its role as a catalyst. Characteristically, German exports target countries with high standards of education. We also conclude that German exports alone cannot be regarded as a self-sufficient tool leading the EU out of the crisis but can serve as a good start for much more fundamental changes that Europe needs.


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