Modification of Foreign Trade Gravity Model Considering the Quality Infrastructure

Abstract

In the article, a modification of the foreign trade gravity model, in which the economic size of trading countries with consideration of the indices characterizing the development of their quality infrastructures, is proposed. The quality infrastructure refers to a set of interacting institutional areas: standardization, metrology, accreditation, conformity assessment. The index of quality infrastructure can be assessed using specially created indices (metrics) that take into account activities in the field of standardization, metrology, accreditation, and conformity assessment.
The performance of the modified gravity model considering the quality infrastructure indices of the trading countries that allows to analyze factors affecting exports, including technical measures, is shown. It is proved that the modified gravity model reflects the interaction not only of the economic size of the countries, but also their quality infrastructure. The dual nature of quality infrastructure, which simultaneously affects the economies’ exports and imports, is noted. For practical application of the proposed gravity model an appropriate accumulation of information necessary for calculating the quality infrastructure index is needed.