According to the theoretical underpinning of the gravity model that bilateral trade
flows are explained positively by the economic size and level of two countries, and
negatively by the geographical distance between them as a proxy for trade costs, we can
expect a positive sign in a and b, and a negative sign in g.Of particular importance is the
coefficient for a dummy variable, d, which is useful for identifying the intensity of trade
integration with Thailand. A positive and statistically significant coefficient, d, means
that trade flows with Thailand exceed the level predicted by the gravity elements,
thereby implying the partner’s preferential economic ties with Thailand.