Abstract
This article is the first empirical attempt using a panel-gravity trade model to analyze the bilateral trade patterns between China and 13 OPEC member countries over the period 1998–2014. Our findings reveal that the gravity equation fits the data reasonably well. We confirm the existence of long-term relationships between the bilateral trade flows and the main components of gravity model-GDP, income (GDP per capita), the difference in income, exchange rate, the openness level, distance, and WTO membership—through the Fixed effects (FE), Random effects (RE), and the FMOLS approaches. The estimation results show that the trade pattern between China and OPEC member countries relies on the Heckscher-Ohlin (H-O) theory, thus being explained by difference in factor endowments such as energy resources and technology.
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