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The proper panel econometric specification of the gravity equation: A three-way model with bilateral interaction effects

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Author Info
Peter Egger
Michael Pfaffermayr

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Abstract

We argue that the proper specification of a panel gravity model should include main (exporter, importer, and time) as well as time invariant exporter-by-importer (bilateral) interaction effects. In a panel of 11 APEC countries, the latter are highly significant and account for the largest part of variation. Copyright Springer-Verlag Berlin Heidelberg 2003

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File URL: http://hdl.handle.net/10.1007/s001810200146
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Publisher Info
Article provided by Springer in its journal Empirical Economics.

Volume (Year): 28 (2003)
Issue (Month): 3 (July)
Pages: 571-580
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Handle: RePEc:spr:empeco:v:28:y:2003:i:3:p:571-580

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Related research
Keywords: Key words: Gravity equation; Panel econometrics; JEL classification: C33; F14; F15;

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This page was last updated on 2009-11-7.

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