Gravity model of trade: unobserved heterogeneity and endogeneity
We consider the estimation of the Gravity model of trade, which involves flows of trade, say exports, from country i to country j in time period t. We model the unobserved heterogeneities in export and import countries separately by proposing an easy-to-implement generalised method of moments estimat...
| Main Authors: | , , , |
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| Format: | Conference Paper |
| Published: |
2014
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| Online Access: | http://hdl.handle.net/20.500.11937/77078 |
| _version_ | 1848763814610206720 |
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| author | Chan, Felix Greene, William Harris, Mark N. Konya, Laszlo |
| author_facet | Chan, Felix Greene, William Harris, Mark N. Konya, Laszlo |
| author_sort | Chan, Felix |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | We consider the estimation of the Gravity model of trade, which involves flows of trade, say exports, from country i to country j in time period t. We model the unobserved heterogeneities in export and import countries separately by proposing an easy-to-implement generalised method of moments estimator. The new estimator avoids the issues associated with the familiar fixed effects treatment of the unobserved heterogeneity in this type of model and at the same time is consistent and asymptotically normal in the presence of potentially endogenous covariates. The proposed approach can also estimate the unobserved heterogeneities and therefore allows further analysis on the individual, as well as time varying, characteristics of both import and export countries. |
| first_indexed | 2025-11-14T11:09:27Z |
| format | Conference Paper |
| id | curtin-20.500.11937-77078 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T11:09:27Z |
| publishDate | 2014 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-770782020-04-29T05:30:24Z Gravity model of trade: unobserved heterogeneity and endogeneity Chan, Felix Greene, William Harris, Mark N. Konya, Laszlo We consider the estimation of the Gravity model of trade, which involves flows of trade, say exports, from country i to country j in time period t. We model the unobserved heterogeneities in export and import countries separately by proposing an easy-to-implement generalised method of moments estimator. The new estimator avoids the issues associated with the familiar fixed effects treatment of the unobserved heterogeneity in this type of model and at the same time is consistent and asymptotically normal in the presence of potentially endogenous covariates. The proposed approach can also estimate the unobserved heterogeneities and therefore allows further analysis on the individual, as well as time varying, characteristics of both import and export countries. 2014 Conference Paper http://hdl.handle.net/20.500.11937/77078 restricted |
| spellingShingle | Chan, Felix Greene, William Harris, Mark N. Konya, Laszlo Gravity model of trade: unobserved heterogeneity and endogeneity |
| title | Gravity model of trade: unobserved heterogeneity and endogeneity |
| title_full | Gravity model of trade: unobserved heterogeneity and endogeneity |
| title_fullStr | Gravity model of trade: unobserved heterogeneity and endogeneity |
| title_full_unstemmed | Gravity model of trade: unobserved heterogeneity and endogeneity |
| title_short | Gravity model of trade: unobserved heterogeneity and endogeneity |
| title_sort | gravity model of trade: unobserved heterogeneity and endogeneity |
| url | http://hdl.handle.net/20.500.11937/77078 |