A new econometric model to analyse variations and structural changes in international trade: applications to the Norwegian import trade across continents and over time Online publication date: Tue, 03-Nov-2015
by Yohannes Yebabe Tesfay
International Journal of Trade and Global Markets (IJTGM), Vol. 8, No. 4, 2015
Abstract: This paper proposes to apply a new econometric model to assess Norwegian imports over the world's continents. The paper applies the two-stage non-full rank hierarchical linear econometric model for yearly import data ranging from 1988 to 2014. The econometric model can give important information about the Norwegian import pattern without using other predictor variables. Furthermore, the model incorporates the Hecksher-Ohlin theory of international trade and can show: (a) the overall trade pattern and (b) the potential structural changes of the import trade. The results suggest first that the Norwegian import expenditure shows heterogeneity across world continents. The continent of Europe has a market share alone of 69.3%. Moreover, more than 95% of Norwegian imports are dependent on imports from the three continents of Europe, Asia and Oceania, and North and Central America. Second, the results suggest potential structural changes over both continents and items for Norwegian imports.
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