Determinants of Kosovo Trade: A Gravity Model Approach

Florin Peci, Mario Holzner, Enver Kutllovci
2010 South East European Journal of Economics and Business  
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
more » ... es 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.
doi:10.2478/v10033-010-0013-4 fatcat:eq2qlyiu7rajtasnzku733lcqe