Abstract

This study aims at exploring the impact of economic globalization factors on the gravity economic systems. Nonetheless, the basis of the research is a gravity economic system exposed to the impacts of globalization, and the concern is to explore the effects of the exposure on the influences of distance and economic sizes on the model. Recognizing the role of population growth and globalization in driving bilateral trade follows is one of the objectives of this research as should be part of an economic model. The study used the modified gravity and globalization variables, data retrieved from the CEPII, the World Fact-book, and the World Bank. The ordinary squares regression and STATA statistical software were used to investigate the hypotheses. The model leading to the general hypothesis that globalization is reducing the cost of entry, and total time required to set up a business and to minimize the bureaucracy associated with registering businesses and launching operations. The trade flow latent variable should contain information on export, import, free trade agreements, preferential trade agreements, and union memberships, which would help in identifying globalization factors that mediate the interaction between global variables and bilateral trade responses.