Structural gravity and fixed effects

• 成果类型: Article
• 署名作者: Fally, Thibault
• 署名单位: University of California System; University of California Berkeley
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2015.05.005
• 发表日期: 2015
• 页码: 76-85
• 关键词: gravity; structural estimation; Poisson-PML estimator

摘要

The gravity equation for trade flows is one of the most successful empirical models in economics and has long played a central role in the trade literature (Anderson, 2011). Different approaches to estimate the gravity equation, i.e. reduced-form or more structural, have been proposed. This paper examines the role of adding-up constraints as the key difference between structural gravity with multilateral resistance indexes and reduced-form gravity with simple fixed effects by exporter and importer. In particular, estimating gravity equations using the Poisson pseudo-maximum-likelihood estimator (Poisson PML) with fixed effects automatically satisfies these constraints and is consistent with the introduction of multilateral resistance indexes as in Anderson and van Wincoop (2003). (C) 2015 Elsevier B.V. All rights reserved.