<p>Distance is of great influence when deciding whom to trade with. This thesis examines how the importance of distance in international trade has evolved. This is done using an extended generalized gravity model, which includes population, real exchange rate and a dummy variable for membership in the European Union. Using data for the EU27 and the four largest economies in the world outside of EU, this model estimates the effect of distance on trade from 1980 to 2005. This thesis shows that the impact of distance has evolved towards having a greater negative effect on trade during the observed years. The reason for this could be a development towards regional trade, at the expense of long-distance trade.</p>
| Identifer | oai:union.ndltd.org:UPSALLA/oai:DiVA.org:sh-3286 |
| Date | January 2009 |
| Creators | Ygge, Johan |
| Publisher | Södertörn University College, School of Social Sciences |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, text |
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