<abstract xml:lang="en" xmlns="http://www.w3.org/1999/xhtml"><p>This study attempts to identify and quantify the factors affecting bilateral trade flows between Kosovo and its trading partner countries using a gravity model. The econometric model is estimated based on both economic and institutional aspects. The results show that family networking with Kosovo emigrants determines to a large extent both exports and imports, while corruption and informality in the partner country seem not to be issues with regard to Kosovo imports. This comes as a surprise given the initial assumption that Kosovo trades more with countries that have a high share of corruption because of informal networks between small and medium enterprises (SME) predominant in Kosovo. The regional CEFTA free trade agreement has a positive effect on both Kosovo imports and exports. Key words: international trade, gravity model, informality, Kosovo</p></abstract>

This study attempts to identify and quantify the factors affecting bilateral trade flows between Kosovo and its trading partner countries using a gravity model. The econometric model is estimated based on both economic and institutional aspects. The results show that family networking with Kosovo emigrants determines to a large extent both exports and imports, while corruption and informality in the partner country seem not to be issues with regard to Kosovo imports. This comes as a surprise given the initial assumption that Kosovo trades more with countries that have a high share of corruption because of informal networks between small and medium enterprises (SME) predominant in Kosovo. The regional CEFTA free trade agreement has a positive effect on both Kosovo imports and exports. Key words: international trade, gravity model, informality, Kosovo

Determinants of Kosovo Trade: A Gravity Model Approach

The Vienna Institute for International Economic Studies (wiiw), Vienna

Faculty of Economics, University of Prishtine

South East European Journal of Economics and Business

{"article-title":"Determinants of Kosovo Trade: A Gravity Model Approach"}

This study attempts to identify and quantify the factors affecting bilateral trade flows between Kosovo and its trading partner countries using a gravity...

Determinants of Kosovo Trade: A Gravity Model Approach

Published Online: Jun 03, 2011

Page range: 33 - 41

DOI: https://doi.org/10.2478/v10033-010-0013-4

This content is open access.