A fast, easy, and efficient estimator for the trade flux between heterogeneous economies
AbstractCompared to time-series or cross-section analyses, panel data allow us to control for individual specific characteristics - possibly unobservable - which may be correlated with certain explanatory variables in the specification of an economic relationship. Not controlling for unobservables leads to obtaining biased results. After controlling for such unobservable characteristics, we calculate efficient estimates of a trade flux equation between heterogeneous economies.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 3457.
Date of creation: 05 Mar 2007
Date of revision:
international trade; POLS estimators; individual heterogeneity; fixed effects; random effects;
Find related papers by JEL classification:
- F15 - International Economics - - Trade - - - Economic Integration
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-06-11 (All new papers)
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