THE MACRO DETERMINANTS OF THE ROMANIAN PHARMACEUTICAL IMPORTS AND EXPORTS IN 2001-2018 PERIOD USING THE GRAVITY MODEL

Abstract

: Purpose – The aim of this paper is to find out the macro determinants of the Romanian pharmaceutical imports and exports from 2001 to 2018. Design / Methodology / Approach – A gravity model and a panel data were used, the software was EViews 10. The data were collected from the World Bank and the International Trade Centre databases. Findings – The gravity model had a high explanatory power for the Romanian pharmaceutical imports and exports. The market size, the health expenditures of the partner countries, sharing a common border, the EU membership, as well as the former CMEA (Council for Mutual Economic Assistance), have a positive impact on import and export flows, while the geographical distance and the economic distance have a negative impact on the Romanian pharmaceutical trade. Practical implications – The profile of the major suppliers for the Romanian pharmaceutical imports and the profile of the major receiving countries for the Romanian pharmaceutical exports were realized. Originality / Value – The paper offers a valuable insight into the Romanian pharmaceutical trade. The major macro determinants for the Romanian pharmaceutical imports are the share of the pharmaceutical exports in all exports and the export market penetration index for the partner country. The major macro determinants of the Romanian pharmaceutical exports are the share of pharmaceutical imports in all imports and the trade openness for the partner country. Limitations – The paper addresses only the macro determinants of the Romanian pharmaceutical trade flows, therefore further research for the micro determinants is needed.