Seminar paper from the year 2015 in the subject Economics - Foreign Trade Theory, Trade Policy, grade: 2,0, University of Hohenheim (Institute of Economics), language: English, abstract: The gravity equation is a common and often used empirical technique to analyse bilat-eral trade. The relationship between the theoretical background of multinational firms and findings from the empirical research with the gravity equation, however, had not been proven to be strong. This results from the fact that gravity equations which try to explain foreign affiliate sales are ad hoc and therefore the...