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Non‐discriminatory Trade Policies in Panel Structural Gravity Models: Evidence from Monte Carlo Simulations

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  • Richard Sellner

Abstract

This paper provides Monte Carlo (MC) simulation evidence on the performance of methods used for identifying the effects of nondiscriminatory trade policy (NDTP) variables in panel structural gravity models. The benchmarked methods include a fixed effect (FE) estimator that utilizes data on intra national trade flows, the bonus‐vetus (BV) and the two‐stage fixed effect (FE‐2S) estimator. The results indicate that only the FE estimates are unbiased and consistent under very general assumptions of the data generating process. The favourable asymptotic properties of the FE estimator unfold as the number of period T increases.

Suggested Citation

  • Richard Sellner, 2019. "Non‐discriminatory Trade Policies in Panel Structural Gravity Models: Evidence from Monte Carlo Simulations," Review of International Economics, Wiley Blackwell, vol. 27(3), pages 854-887, August.
  • Handle: RePEc:bla:reviec:v:27:y:2019:i:3:p:854-887
    DOI: 10.1111/roie.12401
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    Cited by:

    1. Mulabdic, Alen & Rotunno, Lorenzo, 2022. "Trade barriers in government procurement," European Economic Review, Elsevier, vol. 148(C).
    2. Benedikt Heid & Mario Larch & Yoto V. Yotov, 2021. "Estimating the effects of non‐discriminatory trade policies within structural gravity models," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(1), pages 376-409, February.
    3. Harald Oberhofer & Michael Pfaffermayr & Richard Sellner, 2021. "Revisiting time as a trade barrier: Evidence from a panel structural gravity model," Review of International Economics, Wiley Blackwell, vol. 29(5), pages 1382-1417, November.
    4. Sargis Karavardanyan, 2022. "Short-Term Harm, Long-Term Prosperity? Democracy, Corruption and Foreign Direct Investments in Sino-African Economic Relations," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 64(3), pages 417-486, September.
    5. Lars Karlsson & Peter Hedberg, 2021. "War and trade in the peaceful century: the impact of interstate wars on bilateral trade flows during the first wave of globalization, 1830–1913," Economic History Review, Economic History Society, vol. 74(3), pages 809-830, August.
    6. Ayman El Dahrawy Sánchez‐Albornoz & Jacopo Timini, 2021. "Trade agreements and Latin American trade (creation and diversion) and welfare," The World Economy, Wiley Blackwell, vol. 44(7), pages 2004-2040, July.
    7. Cosimo Beverelli, 2022. "Pull factors for migration: The impact of migrant integration policies," Economics and Politics, Wiley Blackwell, vol. 34(1), pages 171-191, March.
    8. Koffi Dumor & Li Yao & Jean-Paul Ainam & Edem Koffi Amouzou & Williams Ayivi, 2021. "Quantitative Dynamics Effects of Belt and Road Economies Trade Using Structural Gravity and Neural Networks," SAGE Open, , vol. 11(3), pages 21582440211, July.

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