Abstract - Quest for Global Competitiveness - Universidad de Puerto ...

Where; F ij is the attractive force; M i and M j are the masses; D ij is the distance betweenthe two objects and G is a gravitational constant (Kuratani 2004; Head 2003). Ittherefore assumes that the economic size and geographical distance of countries arethe main factors influencing trade relations between countries. The model can thereafterbe augmented to measure the impact of standards on exports.The gravity model used in this paper is a single-country fixed effects model that followsa log-linear econometric time-series specification so as to be able to interpret theestimated coefficient as the elasticity of the variables as well as to capture the temporaldynamics of trade.The gravity model used in this paper has the following specification:ln X US/GY = β 0 + β 1 ln PGDP Gy + β 2 ln PGDP US - β 3 ln Dist US/GY + β 4 ln HACCP US + β 5 lnCBI + β 6 ln STR + U ijtWhere;Ln X it/ji is the natural log of real exports of FFP from Guyana to the US valued at US$‟000 at 2004 prices. Export data were obtained primarily from the United NationsCommodity Trade Statistics (COMTRADE) database and the Bureau of Statistics,Guyana. The data was used at the 2 digit level of dis-aggregation based on revision 1 ofthe standard industrial trade classification system (S.I.T.C). Time series averages wereused to fill missing gaps in the data set for the years 1993 and 1995.Ln PGDP GY and Ln PGDP US are, respectively, the natural log of Guyana‟s real PerCapita GDP and the Per Capita GDP of the US measured in US$‟000 at 2004 prices.Data were obtained from the United Nations.The Per Capita GDP variables were used to measure the effect of income on traderelations between Guyana and the USA. Income measures the economic size ofcountries and respectively reflects purchasing and output capacity of the importing andexporting country. For the importing country, a larger per capita GDP translates into a9