Gravity models with TiVA data: do they bring new results?

Authors: Imre Fertő, Mahammad Kheyirkhabarli, Magdolna Sass

In: Applied Economics Letters, 31(8), 702–705.

DOI: 10.1080/13504851.2022.2145010

Abstract

Using Trade in Value Added (TiVA) data in gravity models may result in new insights into international trade. The aim of this article is to compare whether for a large set of OECD and non-OECD countries, relying on ‘traditional’ foreign trade data and TiVA data results in differences in gravity model estimations. According to our results, these differences are minor, which can be explained by the fact that the inclination of countries to trade gross and value added may be similar.