Factors Determining Czech Export on Different Aggregations with Focus on Electrical Engineering: Gravity Model Approach
| Thesis title in Czech: | |
|---|---|
| Thesis title in English: | Factors Determining Czech Export on Different Aggregations with Focus on Electrical Engineering: Gravity Model Approach |
| Key words: | Determinanty exportu; gravitační modely obchodu; Česká republika; elektrotechnický průmysl. |
| English key words: | Determining factors of export, Gravity models of trade, Czech Republic, Electrical engineering. |
| Academic year of topic announcement: | 2013/2014 |
| Thesis type: | diploma thesis |
| Thesis language: | angličtina |
| Department: | Institute of Economic Studies (23-IES) |
| Supervisor: | doc. Ing. Vladimír Benáček, CSc. |
| Author: | hidden - assigned by the advisor |
| Date of registration: | 03.04.2014 |
| Date of assignment: | 03.04.2014 |
| Date and time of defence: | 22.06.2015 00:00 |
| Venue of defence: | IES |
| Date of electronic submission: | 13.05.2015 |
| Date of proceeded defence: | 22.06.2015 |
| Opponents: | doc. PhDr. Lubomír Cingl, Ph.D. |
| URKUND check: | |
| Guidelines |
| Pečlivě a systematicky. |
| References |
| VAN BERGEIJK, P. & BRAKMAN, S. (2010): "Introduction: The comeback of the gravity model." In VAN BERGEIJK, P. & BRAKMAN, S. (editors), "The Gravity Model in International Trade: Advances and Applications," Cambridge: Cambridge University Press.
BUSSIERE, M., FIDRMUC, J. & SCHNATZ, B. (2005): "Trade integration of Central and Eastern European countries: lessons from a gravity model." Working paper series, European Central Bank, European Central Bank. CARRERE, C. (2003): "Revising the effects of regional trading agreements on trade flows with proper specification of the gravity model." CERDI etudes et documents, CERDI, Université d'Auvergne, Clermont Ferrand, France. DASCAL, D., MATTAS, K & V. TZOUVELKAS, V. (2002): "An analysis of EU wine trade: A gravity model approach." International Advances in Economic Research 8(2): pp. 135-147. FINK, C. (2009): “Has the EU’s single market program led to deeper integration of EU services markets?” Working paper, Groupe d’Economie Mondiale at Sciences Po. GENCER, A. H. (2012): ‘Gravity modelling of Turkey’s international trade under globalization.” In “International Trade,” SESSION 2A: International Trade, pp. 31-34. Istanbul Aydin University Turkey, Almaty KAZAKHSTAN: International Conference on Eurasian Economies 2012. MARTINEZ-ZARZOSO, I. & NOWAK-LEHMANN, F. (2003): "Augemnted Gravity Model: An Empirical Application to Mercosur-European Union Trade Flows." Journal of Applied Economics, 6(2): pp. 291-316. PAAS, T. (2002): “European integration and EU Eastward enlargement process in international trade: Using gravity approach for exploring bilateral trade flows.” In “The 42nd Congress of the European Regional Science Association”. SILVA, J. S. & TENREYRO, S. (2006): “The log of gravity.” CEP discussion papers, Centre for Economic Performance LSE. |
| Preliminary scope of work |
| Motivation:
The thesis focuses on the analysis of Czech export and the determination of different factors influencing its volume. The analysis, evaluation and recommendations are based on the comparison with France. France was chosen because of its geographical proximity and similarity to some extent on one hand, on the other hand, because of its relatively large market in comparison with the Czech one. The thesis concentrates on the electrical engineering; special attention is given to the electric motors. The gravity model of international trade is used for the trade flow estimations. The analysis is done using data on 60 countries from period between 1995 and 2014. The data, methodology and current state of the economies and the sector is described before the analysis is done. The analysis firstly concentrates on the whole economies, after, on the electrical engineering, and finally on the specific product, the electric motors. Based on the results from the models, the evaluation of the export is done and further the indication of opportunities for the Czech exporters as well. Hypotheses: 1. There is statistically significant and positive effect of regional trade agreements on the trade between the states. 2. There is statistically significant and negative effect of the real exchange rate on the trade between the states. This is an important difference between France and the Czech Republic in connection with the EMU states. (The real exchange rate is included in the same way as Martinez-Zarzoso & Nowak-Lehmann (2003) included it.) 3. There is statistically significant and positive effect of the trade flows in the previous year on the current trade between the countries. 4. In spite of the fact that both states, France and the Czech Republic, share borders with Germany, the volume of trade flows between France and Germany is larger than between the Czech Republic and Germany. This might be caused by the size of French market and the length of common borders. Methodology: The analysis consists of three models. The first one is the most general and it is connected with the economy as a whole, after the model including electrical engineering follows, and the last one is the most detailed, it considers the specific product. The gravity model of international trade is used to estimate all the previously mentioned models. All the estimations are done using the Poisson pseudo-maximum likelihood estimator. Some more variables are added to the general gravity model, where the trade flow between the two countries depends on GDPs and their distance. The additional variables are the membership in some international organizations or existence of some international agreement between the states, real exchange rate, trade flows in the previous year, common borders, etc. Based on the particular coefficient (its sign and statistical significance) all the above mentioned hypotheses are tested. Expected contribution: Many authors have been using gravity model as a tool for analysis of the international trade. Many authors were dealing with the influence of trade agreements in general (Carrere (2003)), many others investigated the EU influence from many different points of view (Fink (2009)), Dascal et al. (2002)), and some others investigated consequences of new member entrance into some organization (Gencer (2012)). However, there is not so much literature evidence dealing with comparison of two states, which will be one of challenges for the thesis. Another challenge follows Bergeijk & Brakman (2010), who highlighted the need for sectoral and product group analysis. The French-Czech comparison gives new insight from two sides. From the comparison side, as the comparison of two states is not so common in the gravity model analysis, and from the states choice side. Both states have been mentioned in context of European Union (Fink (2009)). Moreover, the Czech Republic has been analysed as a part of Central and Eastern Europe and transition (Bussiere et al. (2005)), or as a part of 2004 enlargement (Paas (2002)). However the analysis of the states as individuals is missing. Further, the topic focuses on one of van Bergeijk & Brakman (2010) challenges, the need for the analysis on the disaggregate level, both on the firm level and on the product group level. This kind of analysis is not so common, but it enables the gravity model to keep pace and to answer current issues. Our aim is to determine whether and how the elasticities differ on particular aggregations (total, industry and product) and try to find possible explanations. OUTLINE: 1. Introduction 2. Theoretical Background and the Review of World Literature 3. Description of the Sector in Both States 4. Methodology Description 5. Data Description 6. An Analysis of Exports Using the Gravity Model a. General Analysis of the Economies b. The Whole Sector Analysis c. Specific Product Analysis 7. Evaluation of the Results a. Comparison of the Theoretical and Real Results b. Comparison between the States c. Recommendations for the Czech Exporters 8. Conclusions 9. References / Bibliography |
| Preliminary scope of work in English |
| Motivation:
The thesis focuses on the analysis of Czech export and the determination of different factors influencing its volume. The analysis, evaluation and recommendations are based on the comparison with France. France was chosen because of its geographical proximity and similarity to some extent on one hand, on the other hand, because of its relatively large market in comparison with the Czech one. The thesis concentrates on the electrical engineering; special attention is given to the electric motors. The gravity model of international trade is used for the trade flow estimations. The analysis is done using data on 60 countries from period between 1995 and 2014. The data, methodology and current state of the economies and the sector is described before the analysis is done. The analysis firstly concentrates on the whole economies, after, on the electrical engineering, and finally on the specific product, the electric motors. Based on the results from the models, the evaluation of the export is done and further the indication of opportunities for the Czech exporters as well. Hypotheses: 1. There is statistically significant and positive effect of regional trade agreements on the trade between the states. 2. There is statistically significant and negative effect of the real exchange rate on the trade between the states. This is an important difference between France and the Czech Republic in connection with the EMU states. (The real exchange rate is included in the same way as Martinez-Zarzoso & Nowak-Lehmann (2003) included it.) 3. There is statistically significant and positive effect of the trade flows in the previous year on the current trade between the countries. 4. In spite of the fact that both states, France and the Czech Republic, share borders with Germany, the volume of trade flows between France and Germany is larger than between the Czech Republic and Germany. This might be caused by the size of French market and the length of common borders. Methodology: The analysis consists of three models. The first one is the most general and it is connected with the economy as a whole, after the model including electrical engineering follows, and the last one is the most detailed, it considers the specific product. The gravity model of international trade is used to estimate all the previously mentioned models. All the estimations are done using the Poisson pseudo-maximum likelihood estimator. Some more variables are added to the general gravity model, where the trade flow between the two countries depends on GDPs and their distance. The additional variables are the membership in some international organizations or existence of some international agreement between the states, real exchange rate, trade flows in the previous year, common borders, etc. Based on the particular coefficient (its sign and statistical significance) all the above mentioned hypotheses are tested. Expected contribution: Many authors have been using gravity model as a tool for analysis of the international trade. Many authors were dealing with the influence of trade agreements in general (Carrere (2003)), many others investigated the EU influence from many different points of view (Fink (2009)), Dascal et al. (2002)), and some others investigated consequences of new member entrance into some organization (Gencer (2012)). However, there is not so much literature evidence dealing with comparison of two states, which will be one of challenges for the thesis. Another challenge follows Bergeijk & Brakman (2010), who highlighted the need for sectoral and product group analysis. The French-Czech comparison gives new insight from two sides. From the comparison side, as the comparison of two states is not so common in the gravity model analysis, and from the states choice side. Both states have been mentioned in context of European Union (Fink (2009)). Moreover, the Czech Republic has been analysed as a part of Central and Eastern Europe and transition (Bussiere et al. (2005)), or as a part of 2004 enlargement (Paas (2002)). However the analysis of the states as individuals is missing. Further, the topic focuses on one of van Bergeijk & Brakman (2010) challenges, the need for the analysis on the disaggregate level, both on the firm level and on the product group level. This kind of analysis is not so common, but it enables the gravity model to keep pace and to answer current issues. Our aim is to determine whether and how the elasticities differ on particular aggregations (total, industry and product) and try to find possible explanations. OUTLINE: 1. Introduction 2. Theoretical Background and the Review of World Literature 3. Description of the Sector in Both States 4. Methodology Description 5. Data Description 6. An Analysis of Exports Using the Gravity Model a. General Analysis of the Economies b. The Whole Sector Analysis c. Specific Product Analysis 7. Evaluation of the Results a. Comparison of the Theoretical and Real Results b. Comparison between the States c. Recommendations for the Czech Exporters 8. Conclusions 9. References / Bibliography |