Intercontinental variations of the import trade pattern of Norway: applications to best linear unbiased estimable functions of hierarchical econometric model

Abstract

This paper’s main purpose is an analysis of the intercontinental variations of Norwegian import expenditures based on yearly import data from 1988 to 2014. We estimate functions for the best linear unbiased estimator (BLUE) of the two-stage non-full rank hierarchical linear econometric model. The results confirm that the top three import-items across continents (in descending order) are machinery and transport equipment, manufactured goods classified mainly by material, and miscellaneous manufactured articles. These three import-items cover more than 60% of the Norwegian imports. Furthermore, the model predicts that Europe is the leading continent for Norwegian imports. The European continent is therefore influential for the Norwegian trade pattern, while other continents show lack of stability and predictability. The results imply that any governmental (or private) trade stability programs have only marginal effects.