Discussion Paper

No. 2008-17 | April 14, 2008
Exports under the Flicker of the Northern Lights


Picture a small open economy in the North Atlantic Ocean, highly dependent on trade with the EU and NAFTA. How important are these trading blocs to the country’s exports? How important is the country’s location and size, and how do these affect the export sectors? A unique version of the gravity model is applied here using an inverse hyperbolic sine function. Typically, the export volume is significantly impacted by the economic size of the exporting country, but in this case it is not. This suggests that the exports from small remote economies are driven by different factors than exports from large economies.

Data Set

JEL Classification:

C23, F1, F14, F15


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Cite As

Helga Kristjánsdóttir (2008). Exports under the Flicker of the Northern Lights. Economics Discussion Papers, No 2008-17, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2008-17

Comments and Questions

Ansgar Belke and Julia Spies - Comment
April 25, 2008 - 09:27

see attached file

Petur Sigurdsson - Exports under the Flicker of the Northern Lights
May 08, 2008 - 11:29

Comment on the paper

"Exports under the Flicker of the Northern Lights."

The paper addresses an interesting topic: why export patterns in small countries may differ from those in large countries. I find that the paper presents a convincing approach to the research question.

The ...[more]

... theory provided is highly relevant to the subject matter, since the
gravity model deals with both population (market) size and GDP
(economic) size. The model also takes distance into account, which is
important for Iceland because of its remote location.

The econometric approach also provides convincing results for this research.

Anonymous - Referee Report
May 28, 2008 - 14:29

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Helga Kristjansdottir - Reply to Comment
June 06, 2008 - 14:27

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Helga Kristjansdottir - Reply to Referee Report
June 06, 2008 - 14:30

See attached file

Helga Kristjansdottir - Revised Version
June 06, 2008 - 14:40

See attached File