Economic Interaction Among the Asia-Pacific Economic Cooperative Countries:Linder Effect on Developed and Developing Countries (1985-1999)

摘要

This study tests the income similarity effect developed by Linder on the developed and developing APEC countries.A modified gravity model is estimated for fourteen APEC countrires based on trade data from 1985 to 1999.The result confirms early prediction that the income similarity effect is stronger for developed APEC countries.The developed APEC countries with similar per capita incomes tned to trade more with each other during the study period.In addition,the level of trade between the APEC countries can be predicted by their economic characteristics.The result reveals that trade between the APEC countries would increase as their economies become more developed.