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Determinants of Barbados Exports: Preliminary Analysis using a Gravity Model Approach

Hippolyte, Rommell (2012): Determinants of Barbados Exports: Preliminary Analysis using a Gravity Model Approach.

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Abstract

Exports are important to the economic growth of Barbados. This study explores the factors that affect the merchandise exports of the country. Using a gravity model on 2005 data on 105 importing countries the paper shows that exports of Barbados are positively influenced by the GDP and GDP per capita of importing countries, participation in the Caribbean Community (CARICOM) which is a regional trade agreement, and countries that speak English. In contrast, the distance between Barbados and importing countries has a strong negative impact on exports. Other preferential market access arrangements Barbados enjoys, such as bilateral trade agreements and the Generalised System of Preferences, have insignificant effects on export flows. The model was also used to highlight markets with increased export potential for the country. It is expected the results of this application of the gravity model may particularly interest policymakers in Barbados.

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