Table 2. Explanation of Expected Signs on Independent Variables
__________Variable__________ |
Expected |
_______________Explanation_______________ |
GDP of importing country |
+ |
As income increases purchases are likely to |
GDP of exporting country |
+ |
Higher GDP indicates potential to export |
Per capita income of |
+ |
A higher per capita income indicates greater |
Per capita income of |
+ |
A higher per capita income indicates higher |
Distance |
- |
Proxy for cost of transportation. The further |
Exchange rate |
- |
The lower the exchange rate of the exporting |
Price Deflatorus |
+ |
Importing country with high price deflator (a |
Price Deflatori |
- |
An Exporting country with a relatively high |
Effect of Multifiber |
- |
MFA restricted trade in textiles and clothing |
21
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