Empirical Analysis of Georgian Trade Pattern: Gravity Model

Abstract

This paper investigates and analyzes the Georgia's data of trade, export and import. The data cover the periods from 2000 to 2011 using the panel data gravity model of trade. For this purpose the large country sample and long time series and a balanced data have been used. The findings through results of analysis revealed that Georgia's trade is positively determined by the size of the economies, GDP per capita, and common history found to be significant factors influencing Georgia's trade pattern. The results also confirm the hypothesis that foreign direct investment (FDI) is positively correlated with trade.