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on the Newton’s law of universal gravitation.
Until present, this is a popular model applied to
international trade with considerable number of
empirical studies (Anderson, 1979; Bergstrand,
1985; Gbetnkom and Khan, 2002; Erdem and
Nazlioglu, 2008; Hatab, Romstad and Huo,
2010, etc.). Based on previous empirical studies
and additional elements suitable to the fact in
Philippines, the authors recommend a gravity
model with following attributes:
Ln(EXPORTij) = β0 + β1ln(GDPit*GDPjt) +
β2ln(POPit*POPjt) + β3ln(OPENit*OPENjt)+
β4ln(CAPit) + β5ln(DISijt) + β6ln(EDISijt)+
β7ln(INFit)+ β8APECij + β9LANGij + uijt
EXPORT ijt: The Philippines‘ commodity export
turnover to the country j and in year t.
GDPit; POPit; OPENit: Respectively, GDP,
population and economic openness of the Philippines
in year t.
GDPjt; POPjt; OPENjt: Respectively, GDP,
population and economic openness of the country j and
in year t.
CAPit: Foreign capital invested in Philippines in
year t.
INFit: Inflation rate of the Philippines in year t.
DISij: Geographic distance between the Philippines
and the country j.
EDISijt: Economic distance between the Philippines
and the country j in year t (measured by the variance
in average per capita GDP between two countries – in
absolute value).
ANANALYSISOF FACTORSAFFECTINGCOMMODITYEXPORT
TURNOVEROFTHEPHILIPPINESBYTHEGRAVITYMODEL
DANG TAT THANG, MA., MAI VIET ANH, PhD., TRAN LUONG DUC, MA.
- Thai Nguyen University of Economics and Business Administration*
In recent years, decisive reforms conducted by the Government of the Philippines have brought about
significant achievements. For a single period of 2000-2016, the average economic growth of the
Philippines reached 8,64%/year. However, according to comments of ASEAN economists, commodity
export of the Philippines has not been relevant to potential. This paper use the gravity model to analyzes
the factors affecting commodity export turnover of the Philippines for the period of 2000-2017. On the
basis of promoting positive and limiting negative factors, the paper recommends measures to strengthen
export turnover of the Philippines in the future.
Keywords: Factors, export turnover, commodity, gravity model
Received: August 16
th
, 2018
Revised: September 27
th
, 2018
Accepted for publication: October 9
th
, 2018
I
n the context of globalization, foreign trade
activities in general and commodity export
activities in particular of the countries are
expanded to the direction of development.
The intensive integration into global economy
and decisive reforms of the Government of the
Philippines help the country obtain substantial
achievements. For a single period of 2000-2016,
the average economic growth of the Philippines
reached 8,64%/year (World Bank, 2018). In
addition to economic growth, the commodity
export activities of the Philippines are facing
continuous successes in regional and global
markets. Electronic, processing or green products
of the Philippines have not only positive
marketshare in ASEAN market but also in other
markets such as Asia and Europe, etc. However,
according to comments of ASEAN economists,
the export of Philippines is not relevant to its
real potential. Hence, discovery and analysis of
factors affecting commodity export activities of
the Philippines are essential to current situation.
Research methodology
In addition to descriptive statistics method,
this paper uses gravity model for analysis. This
is a model developed by Timbergen (1962),
Poyhonen (1963) and Linnemann (1966) based
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