GROUP READING SESSION OF FACULTY OF INTERNATIONAL BUSINESS 20/12
22/12/2022
On the afternoon of December 20, a group reading session of the Faculty of International Business took place with the topic "Gravity Models and Related Estimation Issues" reported by Pham Ho Ha Tram, MSc and Duong Thi Thuy Quynh, MSc.
At the beginning of the reading group activity, Duong Thi Thuy Quynh, MSc presented the traditional gravity model developed by Tinbergen (1962) based on the similarity of the law of gravitation discovered by Newton and factors related to international commercial transactions. economy in the international economy. However, the traditional model of Tinbergen still has weaknesses because it does not take into account other external factors such as the participation of countries in signing agreements, a common language, a common border, etc.
To overcome the weakness of the traditional gravity model, Pham Ho Ha Tram, MSc presented a model of gravity built on the basis of the theory of Anderson and Van Wincoop (1979). This theoretical gravity model overcomes the disadvantages of the traditional gravity model when taking into account other influencing factors such as two countries sharing a common language, a common border, joining forces, etc. into multilateral free trade agreements, etc. Besides, the gravitational model estimation methods are also presented such as OLS, Tobit, Panel Fixed Effects, Heckman Model,...
The event received an enthusiastic response from teachers inside and outside the Faculty of International Business.