it predicts bilateral trade flow based on the size of the
economy,the level of GDP and the distance between the two
participant countries
it perfectly predicts trade flow of goods and services between
two countries
it estimates a pattern of international trade
To explain Gravity Model in terms of NAFTA and EU
this model brings an impetus to the host countries by economic
development
foreign direct investment FDI play an important role in the
progress of the nation
the FDI is greatly affected by the economic size and the
distance between the countries. in the recent times due to rise in
globalization the factor of distance has reduced considerably.
FDI plays a major role in bilateral trade.
distance and the size of the economy in terms of GDP plays a
vital role in Gravity model of NAFTA and EU