Application of Gravity Model: Measurement of International Competitiveness of Trade in Services

Abstract

In the first part, the existing different indexes of testing international competitiveness are compared. After analyzing the result, the conclusion is made that existing these indexes are not suitable to a comprehensive evaluation of international competitiveness of trade in services. A new method- “gravity model”, is applied to calculate international competitiveness of trade in services. Based on two group historical data which are major trading powers and various industries of trade in services of China, the new indexes are calculated and analyzed. At the last, countermeasures and advices are given according to Chinese current status of international competitiveness of trade in services.
Key words: Gravity model; International Competitiveness;  Measurement