DETERMINING FACTORS OF TRADE FLOWS IN BLACKSEA ECONOMIC COOPERATION (BSEC) REGION: A PANEL GRAVITY MODEL

After the receding of the atmosphere of the cold war, suspicion and mistrust, the countries of Black Sea area have been able to undertake bold steps to be tightened the relationships among themselves. They come together and decided to how, in the age of globalisation of economies, valuable assets in their possession, such as geographical proximity, common history, cultural bonds and interdependence of their national economies could be efficiently employed for mutual benefit and prosperity. Foundation of the Black Sea Economic Cooperation (BSEC) bases on this intention. In this paper impacts of the gravitational factors on bilateral trade are investigated in case of BSEC region. The estimations of the panel gravity models reveal that economic size and population of the importer countries have a positive impact on trade volume, whereas the distance between them works on the opposite way.