Patterns and potentials of peru's international trade: A gravity approach

Maritza Elizabeth Bermeo-Velasquez, Jinhwan Oh

Research output: Contribution to journalArticlepeer-review

Abstract

Using the gravity model, this study examines Peru's trade patterns by analyzing the country's bilateral trade flows with 186 countries for over a period of 22 years (1990-2011). The empirical results using the Tobit model for the entire dataset are consistent with the general prediction of the gravity model (positive coefficients for economic size and negative coefficients for distance). Among its thirty main partners, Peru has an unrealized trade potential with Argentina, United States, Canada, Brazil, Mexico, Colombia, United Kingdom, France, Germany and Venezuela. Despite the fact that Peru has trade agreements in place with most of these partners, it seems that Peru has not sufficiently utilized these agreements.

Original languageEnglish
Pages (from-to)41-55
Number of pages15
JournalRegional and Sectoral Economic Studies
Volume16
Issue number2
StatePublished - 2016

Keywords

  • Gravity Model
  • Peru
  • Regional integration
  • Tobit model
  • Trade potential

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