The Economic and Social Review, Vol. l6,No. 1, October 1984,pp. 19-30
The Geographical Pattern of Irish Foreign
Trade:
Test of a Gravity Model*
J I M F I T Z P A T R I C K , *
Jim Fitzpatrick and Associates, Dublin.
Abstract: T h i s article assesses the extent to w h i c h e c o n o m i c a p p r o a c h e s to the geographical pattern o f foreign
trade e x p l a i n the pattern o f I r i s h m e r c h a n d i s e i m p o r t s a n d exports. T h e a p p r o a c h adopted is that o f a "gravity" m o d e l o f foreign trade flows. T h i s hypothesises that the geographical pattern o f a country's trade is determined by the e c o n o m i c size o f trade partners a n d their distance apart. T h e "preference s i m i l a r i t y " a p p r o a c h , w h i c h hypothesises that trade in m a n u f a c t u r e d goods is concentrated a m o n g countries with s i m i l a r incomes a n d tastes, is also e x a m i n e d . T h e article finds evidence in favour o f the gravity a p p r o a c h but not the preference similarity hypothesis.
I I N T R O D U C T I O N
T
h e g e o g r a p h i c a l c o n c e n t r a t i o n o f I r e l a n d ' s f o r e i g n t r a d e o n t h e i n d u s t r i a l i s e d c o u n t r i e s i n g e n e r a l , a n d o n t h e U K i n p a r t i c u l a r , is w e l l r e c o g n i s e d . I n 1983 I r e l a n d ' s E E C p a r t n e r s a c c o u n t e d f o r 69 p e r c e n t o f its m e r c h a n d i s e e x p o r t s a n d 67 p e r c e n t o f m e r c h a n d i s e i m p o r t s . T h i s c a n b e seen f r o m T a b l e 1. T h e ' U K shares i n I r i s h e x p o r t s a n d i m p o r t s i n 1983 w e r e 37 p e r c e n t a n d 45 p e r c e n t , r e s p e c t i v e l y . A l l d e v e l o p e d c o u n t r i e s h a d a c o m b i n e d s h a r e o f 88 p e r c e n t o f I r e l a n d ' s e x p o r t s i n 1983, a n d a 92 p e r c e n t s h a r e o f its i m p o r t s . T h e c o u n t e r p a r t o f t h i s d o m i n a n c e b y t h e i n d u s t r i a l i s e d c o u n t r i e s is t h e s m a l l s h a r e a c c o u n t e d f o r b y t h e state t r a d i n g a n d d e v e l o p i n g c o u n t r i e s . T h e c o m b i n e d s h a r e o f these t w o g r o u p s i n I r e l a n d ' s f o r e i g n t r a d e i n 1983 was 11 p e r c e n t i n t h e case o f e x p o r t s a n d 7 p e r c e n t i n t h e case o f i m p o r t s , b o t h v e r y l o w b y i n t e r n a t i o n a l s t a n d a r d s .T h e g e o g r a p h i c a l p a t t e r n o f f o r e i g n t r a d e is o f i n t e r e s t f o r v a r i o u s r e a s o n s . I t w i l l , f o r e x a m p l e , h e l p t o d e t e r m i n e t h e e x t e n t t o w h i c h e c o n o m i c a n d o t h e r
d e v e l o p m e n t s i n i n d i v i d u a l overseas c o u n t r i e s affect t h e I r i s h e c o n o m y . S i m i l a r l y i t w i l l affect t h e i m p a c t o n t h e I r i s h e c o n o m y o f c h a n g e s i n e x c h a n g e rates, i n i n t e r n a t i o n a l t r a d e r e g u l a t i o n s , a n d i n i n t e r n a t i o n a l t r a n s p o r t costs. H o w e v e r , t h e g e o g r a p h i c a l p a t t e r n o f I r e l a n d ' s f o r e i g n t r a d e has r e c e i v e d r e l a t i v e l y l i t t l e a t t e n t i o n i n e c o n o m i c s t u d i e s . S o m e a t t e n t i o n has b e e n p a i d t o c h a n g e s i n t h e g e o g r a p h i c a l p a t t e r n o f t h i s t r a d e , i n p a r t i c u l a r t o t h e d e c l i n e i n t h e i m p o r t a n c e o f t h e U K as a d e s t i n a t i o n f o r I r i s h e x p o r t s a n d t o t h e r o l e o f E E C m e m b e r s h i p i n t h i s (see M a t t h e w s (1980), M c A l e e s e (1984)). H o w e v e r , n o a t t e m p t s h a v e b e e n m a d e t o e x a m i n e t h e g e o g r a p h i c a l p a t t e r n o f I r e l a n d ' s f o r e i g n t r a d e o n a c r o s s - s e c t i o n a l basis o r t o o f f e r a s y s t e m a t i c e x p l a n a t i o n f o r t h i s p a t t e r n . T h i s s i t u a t i o n c o n t r a s t s w i t h t h a t o f t h e p r o d u c t c o m p o s i t i o n o f I r i s h m e r c h a n d i s e t r a d e . A n u m b e r o f s t u d i e s h a v e tested t h e e x t e n t t o w h i c h t h i s p r o d u c t p a t t e r n c o m p l i e s w i t h t h e e x p e c t a t i o n s d e r i v e d f r o m i n t e r n a t i o n a l t r a d e t h e o r y (see M c G i l v r a y a n d S i m p s o n (1973), F a r l e y (1972), F a r l e y (1973), F a r l e y (1981), M c A l e e s e a n d C a r e y (1981)).
Table 1: Origin of Irish imports and destination of Irish exports, 1962, 1970,1977, and 1983 (as% current value, rounded)
Imports Exports
1962 1970 1977 1983 1962 1970 1977 1983
E E C 66 69 68 67* 80 75 76 69*
of which: UK 50 52 48 45 74 62 47 37
other E E C 16 17 20 22 6 13 29 32
Other developed countries 18 17 19 25 11 18 14 19
of which: EFTA 4 5 5 4 1 2 3 5
USA/Canada 10 9 9 16 9 14 8 9
Other 4 3 5 5 1 2 3 5
State trading countries 2 2 2 2 ' — 1 1 1
Less developed countries 11 9 8 5 3 3 8 10
Unclassified 3 3
;
1 6 3 1 1Total 100 100 100 100 100 100 100 100
Source: C S O , External Trade Statistics 1965-66, 1972, a n d Trade Statistics of Ireland, D e c e m b e r 1978, 1983.
• E E C (10), other years are E E C (9).
T h e p u r p o s e o f t h e p r e s e n t a r t i c l e is t o assess t h e e x t e n t t o w h i c h o n e e c o n o m i c t h e o r y o f t h e d i r e c t i o n o f t r a d e h e l p s t o e x p l a i n I r e l a n d ' s f o r e i g n t r a d e p a t t e r n . T h e t h e o r y e x a m i n e d is t h e " g r a v i t y " m o d e l . T h i s is a p p l i e d t o I r e l a n d ' s f o r e i g n t r a d e i n 1977. T h e a r t i c l e c o n c e n t r a t e s o n m e r c h a n d i s e t r a d e o n l y a n d t r a d e i n services is n o t c o n s i d e r e d .
I I G R A V I T Y T R A D E M O D E L S
a b s t r a c t f r o m t h e d e t a i l e d p r o d u c t c o n t e n t o f f o r e i g n t r a d e a n d e x a m i n e t h e l e v e l o f t o t a l t r a d e b e t w e e n c o u n t r i e s o r g r o u p s o f c o u n t r i e s . S i m i l a r a p p r o a c h e s a r e u s e d i n r e g i o n a l s t u d i e s t o e x p l a i n f l o w s s u c h as m i g r a t i o n , c o m m u t i n g , t r a n s p o r t a n d t o u r i s m (see, f o r e x a m p l e , R i c h a r d s o n (1978, p p . 1 9 4 - 1 9 5 ) ) . G r a v i t y m o d e l s , i n g e n e r a l , o b t a i n t h e i r i n s p i r a t i o n f r o m p h y s i c s a n d f r o m t h e i n t e r p l a y o f t h e f o r c e s o f a t t r a c t i o n , a n d resistence. I n t h e case o f i n t e r n a t i o n a l t r a d e t h e m a j o r " t r a d e c r e a t i n g " f o r c e u s e d i n g r a v i t y m o d e l s is e c o n o m i c size as m e a s u r e d b y G N P , p o p u l a t i o n o r g e o g r a p h i c a l a r e a . T h e m a j o r " t r a d e p r e v e n t i n g " f o r c e is d i s t a n c e , r e p r e s e n t i n g b o t h t r a n s p o r t costs a n d o t h e r m o r e p s y c h o l o g i c a l b a r r i e r s (see B e c k e r m a n (1956)). T h e effect o f c o m m e r c i a l p o l i c y o n t r a d e f l o w s has a l s o b e e n tested w i t h i n t h e s e t t i n g o f g r a v i t y m o d e l s b y i n c o r p o r a t i n g p r e f e r e n t i a l t r a d i n g a r r a n g e m e n t s as p o t e n t i a l l y t r a d e c r e a t i n g v a r i a b l e s (see T i n b e r g e n (1962) a n d L i n n e m a n n (1966)). ' •
W h i l e s o m e t i m e s p r e s e n t e d as a n a l t e r n a t i v e t o n e o - c l a s s i c a l t r a d e t h e o r y (e.g., b y L i n n e m a n n (1966)), t h e g r a v i t y a p p r o a c h is c o n s i s t e n t w i t h f a c t o r p r o p o r t i o n s t r a d e t h e o r y . G r a v i t y - t y p e i n f l u e n c e s f a c i l i t a t e o r p r e v e n t t h e r e a l i s a t i o n o f t r a d e f l o w s as d e t e r m i n e d b y c o m p a r a t i v e a d v a n t a g e . F o l l o w i n g u p o n t h e e a r l y w o r k , m o r e r e c e n t s t u d i e s h a v e c o n f i r m e d t h a t g r a v i t y m o d e l s h a v e c o n s i d e r a b l e e x p l a n a t o r y p o w e r w i t h r e g a r d t o t h e g e o g r a p h i c a l p a t t e r n o f i n t e r n a t i o n a l t r a d e (see A i t k i n (1973), H e w e t t (1976), G e r a c h i a n d P r e w o (1977), W e i s s a n d W o l t e r (1979), a n d S a p i r (1981)).
T h e g r a v i t y m o d e l a l s o p r o v i d e s a c o n v e n i e n t f r a m e w o r k w i t h i n w h i c h t o test L i n d e r ' s " p r e f e r e n c e s i m i l a r i t y " h y p o t h e s i s ( L i n d e r 1961). T h e p r e f e r e n c e s i m i l a r i t y a p p r o a c h was d e v e l o p e d i n a n a t t e m p t t o e x p l a i n t h e c o n c e n t r a t i o n o f t r a d e i n m a n u f a c t u r e d g o o d s a m o n g i n d u s t r i a l i s e d c o u n t r i e s . L i n d e r h y p o t h e s i s e d t h a t a m a j o r i t y o f m a n u f a c t u r e d g o o d s a r e d e s i g n e d a n d p r o d u c e d i n i t i a l l y t o satisfy d o m e s t i c d e m a n d , a n d a r e e x p o r t e d o n l y w h e n f i r m l y e s t a b l i s h e d o n t h e h o m e m a r k e t . T h e y a r e , t h e r e f o r e , m o s t l i k e l y t o b e s o l d t o o t h e r d e v e l o p e d c o u n t r i e s h a v i n g s i m i l a r i n c o m e a n d tastes. L i n d e r o b t a i n e d e m p i r i c a l l y i n c o n c l u s i v e r e s u l t s , b u t a n u m b e r o f m o r e r e c e n t s t u d i e s f o u n d e v i d e n c e t o s u p p o r t h i s h y p o t h e s i s . T h i s s u p p o r t consists o f a n e g a t i v e r e l a t i o n s h i p b e t w e e n t h e l e v e l o f t r a d e i n m a n u f a c t u r e d g o o d s a n d t h e size o f t h e per capita i n c o m e d i f f e r e n t i a l b e t w e e n t r a d i n g p a r t n e r s (see F o r t u n e (1971), H i r s c h a n d L e v (1973), S a i l o r s et al (1973)). I n a g r a v i t y m o d e l , per capita i n c o m e d i f f e r e n c e c a n b e i n c o r p o r a t e d as a n a d d i t i o n a l t r a d e - p r e v e n t i n g e x p l a n a t o r y v a r i a b l e .
I l l T E S T O F A G R A V I T Y M O D E L F O R I R I S H T R A D E
a p o s i t i v e f u n c t i o n o f t h e G N P o f t h e t r a d i n g c o u n t r i e s a n d a n e g a t i v e f u n c t i o n o f t h e d i s t a n c e b e t w e e n t h e m . T h e m o d e l tested i s :
M , X = f ( Y , D , K ) (1) w h e r e M , X = t h e m o n e t a r y v a l u e o f I r i s h m e r c h a n d i s e i m p o r t s o r e x p o r t s ,
Y = G N P o f t h e t r a d i n g p a r t n e r ,
D = d i s t a n c e t o / f r o m t h e t r a d i n g p a r t n e r , K = v a r i o u s d u m m y v a r i a b l e s .
T h i s m o d e l is tested u s i n g c r o s s - s e c t i o n d a t a o n I r e l a n d ' s f o r e i g n t r a d e w i t h seventy c o u n t r i e s i n 1977.
T h e i m p o r t a n d e x p o r t statistics u s e d a r e d a t a o n t h e c u r r e n t v a l u e o f I r i s h m e r c h a n d i s e t r a d e p u b l i s h e d b y E u r o s t a t .1 T h e seventy c o u n t r i e s i n c l u d e d a r e t h o s e w i t h w h i c h I r e l a n d h a d r e c o r d e d i m p o r t s a n d e x p o r t s i n 1977. T h e y i n c l u d e 22 d e v e l o p e d c o u n t r i e s , 4 1 less d e v e l o p e d c o u n t r i e s a n d seven state t r a d i n g c o u n t r i e s . R e g a r d i n g t h e i n d e p e n d e n t v a r i a b l e s , t h e G N P d a t a u s e d a r e W o r l d B a n k statistics r e l a t i n g t o 1977.2 D a t a o n distances a r e s h i p p i n g distances f r o m D u b l i n t o t h e m a j o r p o r t o f t h e t r a d i n g p a r t n e r . T h e m a i n s o u r c e o f these d a t a a r e p u b l i s h e d m a r i n e d i s t a n c e t a b l e s a u g m e n t e d i n s o m e cases b y e s t i m a t e s .3
Five d u m m y v a r i a b l e s a r e i n c o r p o r a t e d i n t h e m o d e l . T h e s e a r e i n t e n d e d t o c a p t u r e a n y q u a l i t a t i v e d i f f e r e n c e s i n t h e o p e r a t i o n o f t h e g r a v i t y m o d e l w i t h d i f f e r e n t c o u n t r y g r o u p s . I n e a c h case a v a l u e o f 1 is a t t a c h e d t o c o u n t r i e s t h a t a r e m e m b e r s o f t h e d e s i g n a t e d g r o u p s a n d a v a l u e o f zero is a t t a c h e d t o n o n m e m b e r s . T h e f i v e d u m m y v a r i a b l e s r e p r e s e n t m e m b e r s h i p o r n o n -m e -m b e r s h i p o f t h e f o l l o w i n g g r o u p s o f c o u n t r i e s :
K , = E E C c o u n t r i e s , K2 = A C P c o u n t r i e s (less d e v e l o p e d c o u n t r i e s t h a t a r e s i g n a t o r i e s o f t h e L o m e C o n v e n t i o n ) , K3 = a l l d e v e l o p e d c o u n t r i e s , K4 = state t r a d i n g c o u n t r i e s , K5. = M i d d l e E a s t e r n o i l p r o d u c e r s .
1. Data I r o m Eurostat, EEC Trade by Commodity Classes and Main Countries: January to December 1977, 5-1978 (Supplement to the M o n t h l y E x t e r n a l T r a d e Bulletin). T h i s source was chosen because the classification methods used tacilitated the analysis. T h e choice o f year was dictated by E u r o s t a t data availability at the time when the research was u n d e r t a k e n . T h e r e is no reason to suppose that the p a r t i c u l a r choice o f year raises any difficulties of generalisation.
2. W o r l d B a n k , World Development Report 1979, W a s h i n g t o n : W o r l d B a n k , A n n e x . T h i s gives G N P data in U S dollars c o n v e n e d at official exchange rates. A n u m b e r o f studies have experimented with G N P converted at p u r c h a s i n g p o w e r parity exchange rates but d i d not obtain s u p e r i o r results, see T i n b e r g e n (1962) T a b l e V I - 4 , L i n n e m a n n (1966) T a b l e 5.3 a n d G e r a c h i a n d P r e w o (1977), A n n e x T a b l e 1. T h i s m a y be because n o m i n a l G N P measures p u r c h a s i n g power in international markets.
3. T h e distance tables used are Reed's Marine Distance Tables, L o n d o n : T h o m a s R e e d , 1976, a n d Marine Distance
and Speed Tables, M o b i l e , A l a . : W a t e r m a n Steamship C o m p a n y (no date). T h e a d d i t i o n a l estimates were
N o a priori m a t h e m a t i c a l f o r m u l a t i o n o f t h e r e l a t i o n s h i p b e t w e e n t h e v a r i a b l e s exists. H o w e v e r , p r e v i o u s g r a v i t y s t u d i e s u s i n g r e g r e s s i o n a n a l y s i s h a v e f o u n d t h e b e s t r e s u l t s w i t h a l o g - l i n e a r e q u a t i o n . T h i s f o r m is also u s e d h e r e a n d t h e m o d e l is tested u s i n g O L S r e g r e s s i o n . T h e e x p e c t e d s i g n o n t h e G N P v a r i a b l e (Y) is p o s i t i v e a n d t h a t o n d i s t a n c e ( D ) n e g a t i v e . T h e e x p e c t e d signs o n t h e p r e f e r e n t i a l t r a d e a r r a n g e m e n t d u m m i e s ( K , a n d K2) a r e a l s o p o s i t i v e . E x p e c t a t i o n s r e g a r d i n g t h e o t h e r d u m m y v a r i a b l e s a r e i n d e t e r m i n a t e o n a priori g r o u n d s .
T h e m o d e l is tested f o r six d e p e n d e n t v a r i a b l e s . T h e s e a r e t o t a l m e r c h a n d i s e i m p o r t s ( M , ) , i m p o r t s o f r a w m a t e r i a l s a n d f o o d s t u f f s ( M2) , i m p o r t s o f o t h e r m a n u f a c t u r e d g o o d s ( M3) , t o t a l m e r c h a n d i s e e x p o r t s ( X , ) , e x p o r t s o f r a w m a t e r i a l s a n d f o o d s t u f f s ( X2) a n d e x p o r t s o f o t h e r m a n u f a c t u r e s ( X3) .4
I V R E S U L T S
T h e r e s u l t s a r e p r e s e n t e d i n T a b l e 2. F o r a l l s i x e q u a t i o n s t h e F - s t a t i s t i c s a r e s i g n i f i c a n t a t t h e 1 p e r c e n t l e v e l . R2 r a n g e f r o m .39 t o .82 a n d t h e t w o m a i n e x p l a n a t o r y v a r i a b l e s , G N P (Y) a n d d i s t a n c e ( D ) , h a v e t h e e x p e c t e d signs. T h e m o d e l p e r f o r m s c o n s i s t e n t l y b e t t e r f o r e x p o r t s t h a n f o r i m p o r t s . O n e p o s s i b l e e x p l a n a t i o n f o r t h i s is t h a t e x p o r t s a r e v a l u e d f . o . b . , t h a t is free o f i n s u r a n c e a n d f r e i g h t , w h e r e a s i m p o r t s a r e v a l u e d a t c . i . f . p r i c e s w h i c h i n c l u d e these e l e m e n t s . T h u s e x p o r t p r i c e s m a y b e a m o r e p r e c i s e m e a s u r e o f t r a d e l e v e l s . T h e r e m a y also b e a g r e a t e r t e n d e n c y f o r i m p o r t s o r i g i n a t i n g i n d e v e l o p i n g
Table 2: Results of regression analysis of a gravity model of Irish trade flows, 1977
Dependent Variable
Y D K , K2 K3 K4 K5 R2 F No. Obser
vations
M , +0.5 -0.2 + 1.5* +0.7 + 1.1* —1.4* * + 1.6** .60 15.5*" 70
M2 +0.4* -0.1 + 1.1 +0.9 + 1.1 -1.1 +2.2** .39 6.0** 56
M3 +0.5" - 0 . 4 " + 1.7" -0.6 + 1.1* -1.4* - 2 . 1 " .73 22.4** 65
*1 +0.5*" -0.3 + 1.6** -0.4 + 1.1* -2.3** +0.8 .77 28.8" 69 +0.7** -0.2 +2.5"" +0.3 -0.3 - 2 . 3 " -0.2 .66 14.4" 59 x3 +0.5" -0.2* + 1.3** +0.7 + 1.4** _ 1 9 * * + 1.2** .82 36.5** 62
* = significant at 95% confidence interval. ** = significant at 99% confidence interval.
Dependent V a r i a b l e s : M j = total imports, M2 = raw material a n d food imports, M3 = manufactured
imports, Xt = total exports, X2 = raw material a n d food exports, X3 = m a n u f a c t u r e d exports.
I n d e p e n d e n t V a r i a b l e s : Y = G N P o f trading partner, D = s h i p p i n g distance to trading partner, K j to K j = d u m m y variables representing E E C , A C P , n o n - L D C , state trading a n d M i d d l e E a s t oil p r o d u c e r country groups, respectively.
c o u n t r i e s t o b e i m p o r t e d i n p r o c e s s e d f o r m f r o m t h i r d c o u n t r i e s , i n w h i c h case t h e g r a v i t y m o d e l w o u l d lose s o m e o f i t s e x p l a n a t o r y p o w e r . T h e f a c t t h a t t h e m o d e l e x p l a i n s m a n u f a c t u r e d i m p o r t s ( M3) m u c h b e t t e r t h a n i t e x p l a i n s i m p o r t s o f r a w m a t e r i a l s a n d f o o d s t u f f s ( M2) is c o n s i s t e n t w i t h t h i s c o n c l u s i o n .
O f t h e i n d e p e n d e n t v a r i a b l e s , G N P o f t h e t r a d i n g p a r t n e r (Y) p e r f o r m s c o n s i s t e n t l y b e s t . Since a l o g - l i n e a r f u n c t i o n is u s e d , t h e e s t i m a t e d c o e f f i c i e n t c a n b e i n t e r p r e t e d as a n e l a s t i c i t y . A c r o s s t h e c o u n t r i e s w i t h w h i c h I r e l a n d h a d r e c o r d e d t r a d e i n 1977, a d o u b l i n g o f G N P size is a s s o c i a t e d w i t h a n i n c r e a s e o f j u s t o v e r h a l f i n t h e l e v e l o f m e r c h a n d i s e t r a d e . H o w e v e r , elasticities f o r a
cross-s e c t i o n m o d e l m u cross-s t b e t r e a t e d c a u t i o u cross-s l y . T h e y a r e c l e a r l y n o t a u t o m a t i c a l l y a p p l i c a b l e t o t i m e - s e r i e s o b s e r v a t i o n s , i . e . , t h e m o d e l d o e s n o t i m p l y t h a t a d o u b l i n g o f a n y t r a d e p a r t n e r ' s G N P w o u l d r e s u l t i n a 50 p e r c e n t i n c r e a s e i n I r e l a n d ' s l e v e l o f t r a d e w i t h t h a t c o u n t r y . I n d e e d , c a s u a l o b s e r v a t i o n s h o w s t h a t i n m a n y cases I r e l a n d ' s t r a d e levels h a v e b e e n r i s i n g r a p i d l y r e l a t i v e t o increases i n its t r a d i n g p a r t n e r s ' G N P .
T h e d i s t a n c e v a r i a b l e ( D ) , w h i l e h a v i n g t h e e x p e c t e d s i g n t h r o u g h o u t , is s t a t i s t i c a l l y s i g n i f i c a n t f o r t r a d e i n m a n u f a c t u r e s o n l y . T h e d u m m y v a r i a b l e s g i v e m i x e d r e s u l t s . T h e E E C d u m m y ( K , ) is s t a t i s t i c a l l y s i g n i f i c a n t f o r t o t a l i m p o r t s , f o r m a n u f a c t u r e d i m p o r t s , a n d f o r a l l o f e x p o r t s , w i t h t h e e x p e c t e d p o s i t i v e s i g n i n e a c h case. T h i s i n d i c a t e s t h a t , w i t h t h e e x c e p t i o n o f r a w m a t e r i a l i m p o r t s , I r e l a n d s t r a d e w i t h its E E C p a r t n e r s is h i g h e r t h a n t r a d e w i t h n o n -E -E C c o u n t r i e s h a v i n g o t h e r w i s e s i m i l a r f e a t u r e s . T h e e x i s t e n c e o f p r e f e r e n t i a l t r a d e a r r a n g e m e n t s c a n b e e x p e c t e d t o e x p l a i n t h i s r e s u l t , as w o u l d t r a d i t i o n a l b u s i n e s s ties a n d s i m i l a r i n f l u e n c e s .
A n i m p o r t a n t q u e s t i o n a r i s i n g h e r e is w h e t h e r t r a d e w i t h t h e U K , w h i c h c o n s t i t u t e s s u c h a l a r g e p r o p o r t i o n o f a l l I r i s h t r a d e , is l a r g e l y r e s p o n s i b l e f o r t h e s i g n i f i c a n c e o f t h e E E C d u m m y v a r i a b l e . A r e p e a t o f t h e r e g r e s s i o n w i t h o u t t h e U K d i d n o t s u p p o r t t h i s a n d t h e l e v e l o f s i g n i f i c a n c e o f t h e E E C d u m m y v a r i a b l e was m a i n t a i n e d .
i m p o r t s f r o m these c o u n t r i e s . O n t h e e x p o r t side, t h e r e s u l t s p o i n t t o a
t e n d e n c y t o e x p o r t m o r e m a n u f a c t u r e d g o o d s t o these c o u n t r i e s t h a n t o o t h e r s ,
ceteris paribus.
Table 3: Results ofgravity model of Irish trade with developed countries (DC) and with less developed coun tries (LDC) 1977
Dependent Group Y D R2 F No. Observations
Variable
L D C +0.7'* -0.1 .13 2.96* 41 DC + i . O " -0.6** .71 18.78** 22
M2 L D C +0.7' -0.2 .08 1.96 33
DC +0.5 -0.7** .50 1.82 20
M3 L D C +0:5 +0.3 .07 1.87 36
DC + 1.5" - 0 . 7 " .74 20.84" 22
x . L D C +0.7" -0.1 .19 4.08* 40 DC + 1.2** -0.5** .74 21.02" 22
X2 L D C +0.4 -0.2 .11 2.35 33 DC + 1.3" -0.7** .59 11.08" 22
* 3 L D C +0.7** -0.1 .21 3.98 34
DC + 1.1** - 0 . 5 " .80 29.12** 22 •
* = significant at 95% confidence interval, ** = significant at 99% confidence interval D e p e n d e n t a n d I n d e p e n d e n t variables as i n T a b l e 2.
T h e g r a v i t y m o d e l c a n a l s o b e u s e d t o a n a l y s e I r i s h t r a d e p a t t e r n s w i t h i n
g r o u p s o f c o u n t r i e s . F o r t h i s p u r p o s e t h e m o d e l is r e - e s t i m a t e d f o r t r a d e w i t h
d e v e l o p e d a n d d e v e l o p i n g c o u n t r i e s s e p a r a t e l y . I n t h i s case t h e d u m m y
v a r i a b l e s a r e o m i t t e d l e a v i n g t h e t w o i n d e p e n d e n t v a r i a b l e s , Y a n d D , a n d t h e
s a m e s i x d e p e n d e n t v a r i a b l e s as i n T a b l e 2. T h e r e s u l t s a r e s h o w n i n T a b l e 3. I t
is e v i d e n t t h a t t h e m o d e l is c o n s i d e r a b l y m o r e successful i n e x p l a i n i n g t h e
g e o g r a p h i c a l p a t t e r n o f I r i s h t r a d e w i t h i n t h e d e v e l o p e d c o u n t r y g r o u p t h a n
w i t h i n t h e less d e v e l o p e d c o u n t r y g r o u p . I t is a l s o c l e a r t h a t t h i s is d u e m a i n l y t o
t h e f a i l u r e o f t h e d i s t a n c e v a r i a b l e t o h a v e a n y s i g n i f i c a n t e x p l a n a t o r y p o w e r i n
t r a d e w i t h d e v e l o p i n g c o u n t r i e s . T h e d i s t a n c e v a r i a b l e i n g r a v i t y t r a d e m o d e l s is
g e n e r a l l y r e g a r d e d as c a p t u r i n g b o t h t r a n s p o r t costs a n d o t h e r c u l t u r a l o r
p s y c h o l o g i c a l f a c t o r s w h i c h w o u l d m i l i t a t e a g a i n s t t r a d e . I t is l i k e l y t h a t i t d o e s
so less successfully i n a s a m p l e c o n t a i n i n g d e v e l o p i n g c o u n t r i e s o n l y t h a n
across a w i d e r r a n g e o f c o u n t r i e s . T h e r e a r e a n u m b e r o f p o s s i b l e r e a s o n s f o r
t h i s . F i r s t , o c e a n f r e i g h t rates a r e less r e l a t e d t o s h i p p i n g d i s t a n c e i n t h e case o f
t r a d e w i t h d e v e l o p i n g c o u n t r i e s t h a n w i t h o t h e r c o u n t r i e s (see Y e a t s (1979)).
S e c o n d , s o c i a l a n d c u l t u r a l i n f l u e n c e s o n t r a d e m a y n o t b e v e r y c l o s e l y r e l a t e d
t o d i s t a n c e i n t h e case o f d e v e l o p i n g c o u n t r i e s . F o r e x a m p l e , I r e l a n d c o u l d b e
e x p e c t e d t o h a v e m o r e b u s i n e s s ties w i t h f o r m e r B r i t i s h c o l o n i e s t h a n w i t h
V D I S C U S S I O N
T h i s s e c t i o n discusses t h e r e l e v a n c e o f t h e g r a v i t y m o d e l t o I r i s h t r a d e f l o w s w i t h r e f e r e n c e t o s o m e v a r i a t i o n s o n t h e basis m o d e l . T h e s e v a r i a t i o n s i n v o l v e t w o c h a n g e s i n t h e m o d e l as s p e c i f i e d i n E q u a t i o n (1) a b o v e . F i r s t , t r a n s p o r t costs ( T ) are s u b s t i t u t e d f o r d i s t a n c e ( D ) . S e c o n d , t w o a d d i t i o n a l i n d e p e n d a n t v a r i a b l e s a r e a d d e d t o t h e m o d e l . T h e s e a r e " p r e f e r a n c e s i m i l a r i t y " (S) a n d p o p u l a t i o n o f t h e t r a d i n g p a r t n e r (P).
T h e d i s t a n c e v a r i a b l e i n g r a v i t y m o d e l s is d e s i g n e d t o c a p t u r e b o t h t r a n s p o r t costs a n d o t h e r aspects o f " p s y c h i c d i s t a n c e " b e t w e e n c o u n t r i e s . H o w e v e r , since t h e r e l a t i v e i m p o r t a n c e o f these t w o e l e m e n t s is u n c l e a r , a n d since t r a n s p o r t costs a n d s h i p p i n g d i s t a n c e s m a y n o t b e a l w a y s c l o s e l y r e l a t e d , i t is w o r t h w h i l e t o test a d i r e c t m e a s u r e o f t r a n s p o r t costs as a s u b s t i t u t e f o r d i s t a n c e . A s w i t h d i s t a n c e , t h e e x p e c t a t i o n is t h a t t h i s w i l l b e n e g a t i v e l y a s s o c i a t e d w i t h t r a d e levels. P r e f e r e n c e s i m i l a r i t y is i n c o r p o r a t e d i n o r d e r t o (est t h e e x t e n t t o w h i c h L i n d e r ' s h y p o t h e s i s p r o v i d e s a n e x p l a n a t i o n o f I r e l a n d ' s g e o g r a p h i c a l t r a d e p a t t e r n . I t is tested b y a d d i n g as a n i n d e p e n d a n t v a r i a b l e t h e d i f f e r e n c e b e t w e e n t h e per capita i n c o m e o f I r e l a n d a n d t h a t o f its t r a d i n g p a r t n e r s . I t s h o u l d b e n o t e d t h a t i t is t h e a b s o l u t e size o f t h i s d i f f e r e n c e w h i c h is i m p o r t a n t a n d n o t its s i g n . T h e v a r i a b l e i n c o r p o r a t e d i n t h e m o d e l i s :
w h e r e S = p r e f e r e n c e s i m i l a r i t y , Y = G N P , P = p o p u l a t i o n a n d t h e s u b s c r i p t s i a n d j r e f e r t o I r e l a n d a n d t h e t r a d i n g p a r t n e r , r e s p e c t i v e l y . T h u s s p e c i f i e d , t h e h y p o t h e s i s is t h a t S w i l l b e n e g a t i v e l y c o r r e l a t e d w i t h t h e l e v e l o f t r a d e . R e g a r d i n g p o p u l a t i o n , a n u m b e r o f s t u d i e s h a v e a d d e d t h i s t o T i n b e r g e n ' s t r a d e m o d e l as a n e x p l a n a t o r y v a r i a b l e . T h e s e h a v e h y p o t h e s i s e d a n e g a t i v e r e l a t i o n s h i p b e t w e e n p o p u l a t i o n levels a n d t r a d e f l o w s . R e s u l t s h a v e b e e n m i x e d (see L i n n e m a n n (1966) a n d S a p i r (1981)). T h e r e a r e t w o p o s s i b l e r e a s o n s f o r t h i s . F i r s t , t h e u n d e r l y i n g r a t i o n a l e is a m b i g u o u s a n d has v a r i e d f r o m a u t h o r t o a u t h o r ( o n t h i s see L e a r n e r a n d S t e r n (1970, p p . 1 5 2 - 1 5 3 ) ) . S e c o n d , i n a c r o s s - s a m p l e o f c o u n t r i e s , p o p u l a t i o n a n d G N P a r e p o s i t i v e l y c o r r e l a t e d so t h a t r e g r e s s i o n e q u a t i o n s i n c o r p o r a t i n g b o t h h a v e a m u l t i c o l l i n e a r i t y p r o b l e m . P o p u l a t i o n is t h e r e f o r e i n c o r p o r a t e d i n t h e m o d e l h e r e o n a n e x p e r i m e n t a l basis.
T h e G N P per capita a n d t h e p o p u l a t i o n d a t a a r e W o r l d B a n k d a t a f o r 1 9 7 7s. D a t a o n t r a n s p o r t costs p r e s e n t g r e a t e r d i f f i c u l t y . T h e m e a s u r e u s e d is t h e a v e r a g e q u o t e d m i d - 1 9 8 0 o u t w a r d f r e i g h t r a t e f r o m D u b l i n t o t h e m a j o r p o r t o f t h e t r a d i n g p a r t n e r f o r a s t a n d a r d (20 c u b i c feet) s h i p p i n g c o n t a i n e r .6 T h i s is
5. T h e source is as in footnote N o . 2.
T
a r a t h e r c r u d e m e a s u r e a n d is n o t r e p r e s e n t a t i v e o f b u l k c a r g o rates. H o w e v e r , i t a p p e a r s t o b e t h e m o s t a p p r o p r i a t e o n e t h a t c a n b e o b t a i n e d . S i n c e o u t w a r d s h i p p i n g rates are u s e d , t h e m o d e l is tested f o r e x p o r t s o n l y . T h e m o d e l is t h e r e f o r e as f o l l o w s :
X = f (Y, S, T , P, K ) (2)
w h e r e X = t h e v a l u e o f I r i s h m e r c h a n d i s e e x p o r t s i n 1977, Y = G N P o f t h e t r a d i n g p a r t n e r ,
S = " p r e f e r e n c e s i m i l a r i t y " as d e f i n e d a b o v e , T = t r a n s p o r t costs,
P = p o p u l a t i o n o f t h e t r a d i n g p a r t n e r , K = d u m m y v a r i a b l e s as i n E q u a t i o n (1).
T h e s a m p l e u s e d is t h e s a m e as t h a t f o r E q u a t i o n (1) a n d t h e r e s u l t s a r e p r e s e n t e d i n T a b l e 4. C o m p a r i s o n w i t h T a b l e 2 s h o w s t h a t t h i s e q u a t i o n p e r f o r m s s i m i l a r l y t o t h e basic g r a v i t y m o d e l .
Table 4: Results of gravity model of Irish trade with preference similarity, transport cost and population variables, 1977
Dependent Variable
Y S T P K, K2 K3 K4 K5 R2 F No. obser
vations +0.8" -0.1 - 1 . 5s -0.2 +0.4 +0.8 +0.2 -1.4* +0.6 .79 21.1** 50
x2 +0.6 -0.1 -1.3 +0.1 + 1.8 +0.3 -0.8 -1.3 -0.2 .62 8.9** 44
* 3 +0.9*" +0.1 -0.9* -0.3* +0.5 + 1.0* +0.7 -1.2* +0.7 .84 26.4** 44 * = significant at 9596 confidence interval, " = significant at 9996 confidence interval.
V a r i a b l e s as in T a b l e 2 except S = preference similarity, T = transport costs.
o f m a n u f a c t u r e d e x p o r t s b y i n d i g e n o u s I r i s h f i r m s . M i n i m u m e f f i c i e n t p l a n t size i n m a n y m o d e r n i n d u s t r i e s necessitates i m m e d i a t e p r o d u c t l a u n c h o n t o e x p o r t m a r k e t s . T h e r e l e v a n c e o f p r e f e r e n c e s i r r i i l a r i t y t o I r e l a n d ' s m a n u f a c t u r e d i m p o r t s is n o t e x a m i n e d h e r e . I t w o u l d a p p e a r , a priori, t o h a v e a p p l i c a t i o n t o i m p o r t s o f m a n u f a c t u r e d c o n s u m e r g o o d s b u t n o t n e c c e s s a r i l y so t o c a p i t a l e q u i p m e n t i m p o r t s o r t o m a n u f a c t u r e d c o m p o n e n t s . A n o t h e r f a c t o r t h a t m a y l o w e r t h e e x p l a n a t o r y p o w e r o f t h e p r e f e r e n c e s i m i l a r i t y h y p o t h e s i s i n t h e I r i s h c o n t e x t is I r e l a n d ' s m i d - p o s i t i o n o n t h e i n t e r n a t i o n a l i n c o m e per capita scale (see F i t z p a t r i c k (1983)). T h e m a j o r d e v e l o p e d c o u n t r i e s w i t h w h o m t h e s t r o n g e s t g r a v i t y - t y p e t r a d e c r e a t i n g forces a r e a t p l a y have per capita i n c o m e s c o n s i d e r a b l y g r e a t e r t h a n I r e l a n d . T r a d e w i t h o t h e r m i d d l e i n c o m e c o u n t r i e s faces t r a d e p r e v e n t i n g f a c t o r s i n t h e f o r m o f d i s t a n c e , l a n g u a g e a n d o t h e r b a r r i e r s , a n d a n a b s e n c e o f p r e f e r e n t i a l t r a d e a r r a n g e m e n t s .
V I C O N C L U S I O N S
A s d e s c r i b e d i n t h e i n t r o d u c t i o n , I r e l a n d ' s f o r e i g n t r a d e is h e a v i l y c o n c e n t r a t e d o n a s m a l l n u m b e r o f i n d u s t r i a l i s e d c o u n t r i e s . T h i s a r t i c l e has e x a m i n e d t h e e x t e n t t o w h i c h a g r a v i t y m o d e l o f i n t e r n a t i o n a l t r a d e f l o w s c a n e x p l a i n t h i s . T h e a n a l y s i s suggests t h r e e m a i n c o n c l u s i o n s :
(i) T h e t h r e e m a i n e x p l a n a t o r y v a r i a b l e s u s e d i n g r a v i t y m o d e l s , n a m e l y t h e G N P o f t r a d i n g p a r t n e r s , t h e i r d i s t a n c e a p a r t o r t r a n s p o r t costs, a n d t h e p r e s e n c e o r a b s e n c e o f p r e f e r e n t i a l t r a d e a r r a n g e m e n t s , h a v e c o n s i d e r a b l e e x p l a n a t o r y p o w e r r e g a r d i n g t h e l a r g e s h a r e o f a r e l a t i v e l y s m a l l n u m b e r o f c o u n t r i e s i n I r e l a n d ' s overseas t r a d e . T h e d o m i n a n c e o f t h e U K a n d o t h e r E E C c o u n t r i e s i n I r i s h m e r c h a n d i s e i m p o r t s a n d e x p o r t s c a n , t o a l a r g e e x t e n t , b e e x p l a i n e d i n t h i s w a y . So t o o c a n t h e c o n v e r s e o f these c o u n t r i e s ' d o m i n a n c e o f I r i s h t r a d e , t h a t is t h e r e l a t i v e l y s m a l l s h a r e o f the m a j o r i t y o f t h e c o u n t r i e s o f t h e w o r l d i n I r i s h t r a d e . T h e l o w l e v e l o f G N P o f m a n y o f these c o u n t r i e s , n o t a b l y less d e v e l o p e d c o u n t r i e s , a n d t h e i r d i s t a n c e f r o m I r e l a n d p r o v i d e a s y s t e m a t i c e x p l a n a t i o n o f m u c h o f t h e i r l o w s h a r e i n I r i s h f o r e i g n t r a d e . W i t h r e g a r d t o t h i s l a t t e r p o i n t , h o w e v e r , a n i m p o r t a n t a s p e c t o f t h e m e t h o d u s e d i n t h e a r t i c l e s h o u l d b e n o t e d . As d e s c r i b e d e a r l i e r , t h e m o d e l was tested f o r t h o s e c o u n t r i e s w i t h w h i c h I r e l a n d h a d r e c o r d e d i m p o r t s a n d e x p o r t s i n 1977. T h e s a m p l e d i d n o t i n c l u d e c o u n t r i e s w i t h w h o m I r e l a n d h a d e i t h e r n o t r a d e , o r t r a d e so s m a l l as t o b e u n r e c o r d e d .7 O u t o f a t o t a l o f s o m e 150 less d e v e l o p e d c o u n t r i e s , I r e l a n d h a d r e c o r d e d t r a d e i n b o t h d i r e c t i o n s w i t h o n l y 4 1 s u c h c o u n t r i e s ;
i n 1977. C o n s e q u e n t l y , t h e l a r g e n u m b e r o f s u c h c o u n t r i e s w i t h w h o m I r e l a n d has n o t r a d e a t a l l is a n o t h e r r e a s o n f o r t h e l o w s h a r e o f less d e v e l o p e d c o u n t r i e s i n I r i s h t r a d e . T h e s i t u a t i o n c o u l d b e t h o u g h t o f i n t e r m s o f a t r a d e t h r e s h o l d . A s a p p l i e d h e r e , t h e g r a v i t y m o d e l is u s e d t o e x p l a i n t r a d e levels a f t e r t h e i n i t i a l t h r e s h o l d is c r o s s e d . A n o t h e r q u e s t i o n , n o t a n a l y s e d h e r e , is w h y t h e t h r e s h o l d is c r o s s e d i n s o m e cases a n d n o t i n o t h e r s .
( i i ) U n l i k e t h e c o n v e n t i o n a l g r a v i t y a p p r o a c h , t h e p r e f e r e n c e s i m i l a r i t y h y p o t h e s i s d o e s n o t a p p e a r t o c o n t r i b u t e t o e x p l a i n i n g t h e g e o g r a p h i c a l p a t t e r n o f I r e l a n d ' s m e r c h a n d i s e e x p o r t s . I r i s h m a n u f a c t u r e d e x p o r t s d o n o t a p p e a r t o h a v e d e v e l o p e d t h r o u g h a L i n d e r - t y p e p r o c e s s o f s p i l l o v e r o n t o overseas m a r k e t s f r o m t h e h o m e m a r k e t . T h e r o l e o f f o r e i g n - o w n e d s u b s i d i a r y firms i n these e x p o r t s is t h e m o s t l i k e l y e x p l a n a t i o n f o r t h i s . ( i i i ) A n i m p o r t a n t a s p e c t o f t h e g e o g r a p h i c a l p a t t e r n o f f o r e i g n t r a d e is c h a n g e i n t h i s p a t t e r n o v e r t i m e . I n I r e l a n d ' s case t h e m a i n e x a m p l e o f t h i s , as s h o w n i n T a b l e 1, has b e e n t h e d e c l i n i n g i m p o r t a n c e o f t h e U K as a t r a d i n g p a r t n e r a n d a c o r r e s p o n d i n g i n c r e a s e i n t h e i m p o r t a n c e o f o t h e r E E C c o u n t r i e s . T h i s is g e n e r a l l y seen as r e s u l t i n g f r o m E E C e n t r y i n 1973. T h e p r e s e n t a r t i c l e has c o n c e n t r a t e d o n t h e g e o g r a p h i c a l p a t t e r n o f I r e l a n d ' s t r a d e i n a s i n g l e y e a r , 1977. I t has n o t e x a m i n e d t h e r e l e v a n c e o f t h e g r a v i t y m o d e l t o c h a n g e s i n t h e g e o g r a p h i c a l p a t t e r n o f t r a d e n o r has i t tested t h e e x t e n t t o w h i c h t h e m o d e l ' s e x p l a n a t o r y p o w e r m i g h t a l t e r f r o m o n e p e r i o d t o a n o t h e r . N e v e r t h e l e s s , i t d o e s suggest t h a t a l o n g s i d e t r a d e a r r a n g e m e n t s , e c o n o m i c size o f t h e t r a d i n g p a r t n e r m a y h e l p e x p l a i n c h a n g i n g g e o g r a p h i c a l t r a d e p a t t e r n s . T h e r e l a t i v e e c o n o m i c d e c l i n e o f t h e U K c a n t h e r e f o r e b e seen as c o n t r i b u t i n g t o its r e d u c t i o n i n i m p o r t a n c e as a n I r i s h t r a d i n g p a r t n e r . T h e fact t h a t its d e c l i n e as a d e s t i n a t i o n f o r I r i s h e x p o r t s p r e c e d e d 1973 is c o n s i s t e n t w i t h t h i s .
REFERENCES
A I T K E N , N . D . , 1973. " T h e Effect o f the EEC a n d EFTA o n E u r o p e a n T r a d e : A T e m p o r a l Cross-Section A n a l y s i s " , American Economic Review, V o l . 63, N o . 4, p p . 881-882. B E C K E R M A N , W . , 1956. "Distance a n d the Pattern o f I n t r a - E u r o p e a n T r a d e " , Review
of Economics and Statistics, V o l . 28, N o . 1, p p . 31—40.
F A R L E Y , N.J.J., 1972. " E x p l a n a t o r y Hypotheses f o r I r i s h T r a d e i n M a n u f a c t u r e d G o o d s i n the m i d 1960s", The Economic and Social Review, V o l . 1, N o . 4, p p . 5-33. F A R L E Y , N.J.J., 1973. " O u t w a r d - L o o k i n g Policies a n d I n d u s t r i a l i s a t i o n i n a Small E c o n o m y : Some Notes o n the I r i s h Case", Economic Development and Cultural Change, V o l . 2 1 , N o . 4, p p . 610-628.
F A R L E Y , N.J.J., 1981. " O u t w a r d - L o o k i n g Policies a n d the C h a n g i n g Basis o f I r e l a n d ' s F o r e i g n T r a d e " , The Economic and Social Review, V o l . 12, N o . 2, p p . 73—95. F I T Z P A T R I C K , J., 1983. " T r a d e between N e w l y I n d u s t r i a l i s e d a n d N e w l y I n d u s t r i a l i s
F O R T U N E , J . N . , 1971. " S o m e Determinants o f T r a d e i n Finished M a n u f a c t u r e s " , Swedish Journal of Economics, V o l . 73, N o . 3, p p . 311-317.
G E R A C H I , V . J . a n d W . P R E W O , 1977. " B i l a t e r a l T r a d e Flows a n d T r a n s p o r t a t i o n Costs", Review of Economics and Statistics, V o l . 59, N o . 1, p p . 67-74.
H E W E T T , E., 1976. " A G r a v i t y M o d e l o f C M E A T r a d e " i n J . C . Brada, (ed), Quantitative and Analytical Studies in East-West Economic Relations, B l o o m i n g t o n : I n t e r n a t i o n a l D e v e l o p m e n t I n s t i t u t e .
H I R S C H , S. a n d B . L E V , 1973. " T r a d e a n d Per Capita I n c o m e Differentials: A Test o f the B u r e n s t a m - L i n d e r H y p o t h e s i s " , World Development, V o l . 1, N o . 9, p p . 11-17. L E A M E R , E.E. a n d R . M . S T E R N , 1970. Quantitative International Economics, Chicago:
A l d i n e .
L I N D E R , S.B., 1961. An Essay on Trade and Transformation, S t o c k h o l m : A l m q v i s t a n d W i k s e l l .
L I N N E M A N N , H . , 1966. An Econometric Study of International Trade Flows, A m s t e r d a m : N o r t h H o l l a n d .
M A T T H E W S , A . , 1980. The European Community's External Trade Policy: Implications for Ireland, D u b l i n : E u r o p e a n League f o r E c o n o m i c C o - o p e r a t i o n a n d I r i s h C o u n c i l o f the E u r o p e a n M o v e m e n t .
M c A L E E S E , D . , 1984. " I r e l a n d a n d the E u r o p e a n C o m m u n i t y : T h e C h a n g i n g Pattern o f T r a d e " i n P.J. D r u d y , a n d D . McAleese, (eds.), Ireland and the European Community, C a m b r i d g e : C a m b r i d g e University Press.
M c A L E E S E , D . and P. CAREY, 1981. " E m p l o y m e n t Coefficients f o r I r i s h T r a d e w i t h extra-EEC C o u n t r i e s : Measurement a n d I m p l i c a t i o n s " , The Economic and Social Review, V o l . 12, N o . 2, p p . 115-132.
M c G I L V R A Y , J . a n d D . S I M P S O N , 1973. " T h e C o m m o d i t y Structure o f A n g l o - I r i s h T r a d e " , Review of Economics and Statistics, V o l . 55, N o . 4, p p . 452-458.
P O Y H O N E N , P., 1963. " A Tentative M o d e l f o r the V o l u m e o f T r a d e Between C o u n tries", Weltwirtschaftliches Archiv, V o l . 90, N o . 1, p p . 93-99.
P U L L I A I N E N , K . , 1963. " A W o r l d T r a d e Study. A n E c o n o m e t r i c M o d e l o f the Pattern o f C o m m o d i t y Flows i n I n t e r n a t i o n a l T r a d e i n 1948-1960", Ekonomiska Sandfundis Tidskrift, V o l . 17, N o . 2, p p . 7 8 - 9 1 .
R I C H A R D S O N , H . W . , 1978. Regional and Urban Economics, H a r m o n d s w o r t h : Penguin. S A I L O R S , J . W . et al, 1973. " E m p i r i c a l V e r i f i c a t i o n o f L i n d e r s T r a d e Thesis", Southern
Economic Journal, V o l . 40, p p . 262-268.
SAPIR, A . , 1981. " T r a d e Benefits U n d e r the EEC Generalised System o f Preferences", European Economic Review, V o l . 15, N o . 3, p p . 339-355.
S T E R N , R . M . , 1975. " T e s t i n g T r a d e T h e o r i e s " i n P.B. Kenen, (ed), International Trade and Finance, Frontiers for Research, C a m b r i d g e : C a m b r i d g e University Press.
T I N B E R G E N , J., 1962. Shapingthe World Economy: Suggestions for an International Economic Policy, N e w Y o r k : T w e n t i e t h Century F u n d .
WEISS, F . D . a n d F. W O L T E R , 1979. " T e s t i n g Hypotheses f o r the V o l u m e a n d C o m m o d i t y C o m p o s i t i o n o f East-West T r a d e " i n H . Giersch, (ed), International Economic Development and Resource Transfer, Workshop 1978. T u b i n g e n : J . C . B . M o h r (Paul Siebeck).
