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Trading Partners and Trading Volumes: Implementing the Helpman-Melitz-Rubinstein Model Empirically

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  • J. M. C. Santos Silva
  • Silvana Tenreyro

Abstract

Helpman, Melitz, and Rubinstein (2008)-HMR-present a rich theoretical model to study the determinants of bilateral trade flows across countries. The model is then empirically implemented through a two-stage estimation procedure. This note seeks to clarify some econometric aspects of the estimation approach used by HMR and explore the consequences of possible departures from the maintained distributional assumptions.

Suggested Citation

  • J. M. C. Santos Silva & Silvana Tenreyro, 2009. "Trading Partners and Trading Volumes: Implementing the Helpman-Melitz-Rubinstein Model Empirically," CEP Discussion Papers dp0935, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp0935
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    More about this item

    Keywords

    Gravity equation; Heteroskedasticity; Jensens inequality;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • F10 - International Economics - - Trade - - - General

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