The dynamic panel gravity model of trade in photovoltaic cell panels in the Asia–Pacific region

Abstract Solar energy harvested using photovoltaic cell panels represents one of the essential alternatives to fossil fuels as a source of clean and affordable energy. In the XXI century, the Asia–Pacific region has faced unprecedented growth in trade of these commodities, caused by national energy transition policies and the development of regional and international trade relations. This study aims to evaluate the impact of selected determinants that shaped this growth by demonstrating a single-commodity gravity model of trade in photovoltaic cell panels in the Asia–Pacific region in 2000–2019, based on Tinbergen’s gravity model of trade assumptions broadened with the dynamic panel regression model approach. The study tested fifteen potential variables and presented the extended Tinbergen’s model that incorporates the most significant factors. The obtained results suggest that the energy sector’s condition, low-carbon energy transition policies, size of cumulative installed capacity of photovoltaic cell panels, and participation in the WTO, regional trade agreements, and common language are also gaining importance as crucial determinants of international trade flows in photovoltaic cell panels. The research findings contribute to the research methodology by proposing a single-commodity dynamic panel gravity model of trade and an overview of the impact of individual factors that can stimulate the growth of trade relations in the studied region.