Explaining the volume of North-South trade in Ireland: A gravity model approach

We address the question of whether the volume of manufacturing trade betwee n Northern Ireland and the Republic of Ireland is more or less than might b e expected in the light of international experience. We estimate a gravity equation for bilateral manufacturing trade between 28 developed countries f rom 1970 to 1992. Using the results as benchmark, we find that North-South trade in Ireland is greater rather than less than might be expected. The fi nding is robust with respect to a wide range of alternative specifications and alternative ways of measuring the key variables.