A Panel Data Analysis of Chinas Trade Pattern with OPEC Members: Gravity Model Approach
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Keywords

Gravity model, China, OPEC, Energy, Panel data, Trade pattern

Abstract

In this study, we have endeavoured to explain China’s trade pattern with OPEC member countries by employing gravity model over the period 1990-2016. The estimation results demonstrate that the gravity equation fits the data pragmatically. China was the first biggest oil importer worldwide with about 73 per cent of her oil coming from OPEC member countries. In fact, energy can be considered as the most traded commodity and also the core reason for the trade volume growth between China and the OPEC member countries in last two decades. We have confirmed that China’s bilateral trade with OPEC members positively impacts on GDP, income (GDP per capita), trade openness in China and the WTO member countries in OPEC. While negatively influence on distance (trade cost) and supports Linder hypothesis. Depreciation in bilateral exchange rates also negatively influence on China’s bilateral trade with OPEC.

https://doi.org/10.18488/journal.aefr.2018.81.103.116
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