We Just Ran 17 Regressions: – A gravity analysis of Swedish trade with Eastern Europe

Abstract: After the fall of communism, democracy reigned supreme in large parts of the former Eastern bloc. This opened up new and unexplored possibilities for trade. This paper aims to perform a descriptive analysis of Swedish trade with a number of former centrally planned regimes. In order to do this, a thorough statistical examination is conducted and later on a gravity model is constructed based on previous studies within this area. The model shows that Swedish trade volume with the Eastern transition economies, in most cases, is up to par or even exceeding Swedish trade volume in general when GDP, distance between countries and other such variables are taken into account. Although there are many regional differences, the main conclusion is that the potential for non-GDP driven trade growth between Sweden seems to be exhausted in most cases.