GLOBALIZATION, INTERNATIONAL TRADE, AND HUMAN DEVELOPMENT: A CASE OF CENTRAL AND EASTERN EUROPE
GLOBALIZATION, INTERNATIONAL TRADE, AND HUMAN DEVELOPMENT: A CASE OF CENTRAL AND EASTERN EUROPE

Summary/Abstract: Our paper focuses on estimating the effect of human development on international trade flows in the global economy with the help of the generalized gravity model. We are particularly interested in the countries of Central and Eastern Europe (CEECs). Previous research and empirical studies also investigated the determinants of trade flows but concentrated only on traditional gravity variables such as the size of trading partners, factor abundance, technology differences, and/or distance. Our novel approach introduces the role of aggregate human development indicators such as Human Development Index and its constituent components on top of the standard set of gravity model variables. Our findings confirm that both aggregate and disaggregate indicators of human development influence the volume of international trade flows.

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