International trade, technological innovation and income: a gravity model approach

In this research, we estimate a gravity equation augmented with technological innovation and transport infrastructure variables in order to analyse the impact of these variables on international trade. According to our results, investing in transport infrastructure and technological innovation leads to the improvement and maintenance of the level of competitiveness. Moreover, our results support the hypothesis that countries tend to trade more when they are "closer" from a technological point of view and that the development of information technology has lowered the effect of geography on trade