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Determinants of Albanian Agricultural Export: The Gravity Model Approach

Author

Listed:
  • Braha, K.
  • Qineti, A.
  • Cupák, A.
  • Lazorčáková, E.
Abstract
Despite its huge agricultural potential, Albania has a sharp trade deficit with agricultural commodities. The main focus of this study is to analyse key determinants of its agricultural export. Here we employ baseline gravity model considering conventional gravity variables for Albanian export flows for the period 1996-2013. The Poisson Pseudo-Maximum Likelihood (PPML) regression is used for stepwise estimations of the augmented gravity model, including effects of Albanian Diaspora, exchange rate and price stability, trade liberalization and institutional distance. Main findings suggest that agricultural export flow increases with increasing economic size, revealing higher impact of importer’s absorbing potential comparatively to Albania’s productive potential. On the other hand, growth in domestic demand, resulting from increase in population, leads to reduction of agricultural export. Moreover, agricultural export flows are determined by low transportation costs (distance), adjacency proximity (sharing common border) and linguistic similarities. Presence of Albanian Diaspora residing in the importing countries facilitates export flows. Results of this study reveal that exchange rate variability has a positive impact, while bilateral institutional distance has diminishing effects on Albanian agricultural exports.

Suggested Citation

  • Braha, K. & Qineti, A. & Cupák, A. & Lazorčáková, E., 2017. "Determinants of Albanian Agricultural Export: The Gravity Model Approach," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 9(2), June.
    • Handle: RePEc:ags:aolpei:262457
    DOI: 10.22004/ag.econ.262457
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    2. Nazir Muhammad Abdullahi & Xuexi Huo & Qiangqiang Zhang & Aminah Bolanle Azeez, 2021. "Determinants and Potential of Agri-Food Trade Using the Stochastic Frontier Gravity Model: Empirical Evidence From Nigeria," SAGE Open, , vol. 11(4), pages 21582440211, December.
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    4. Glediana Zeneli (Foto) & Arsen Benga & Altin Hoti, 2024. "Analysis of Albania’s Trade Direction: Is the Open Balkan a New Center of Gravity?," Economies, MDPI, vol. 12(7), pages 1-30, July.

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