The Gravity Equation in International Economics and International Business Research: A Note
This note discusses methodological issues and practical concerns for international economists and international business scholars who apply the gravity equation in their research. The most important message of the note is that this equation should correct for multilateral resistance factors. We propose a relatively low-cost specification and estimation to implement such correction, which is robust in the presence of various endogeneity effects and non-stationary variables. In the presence of zero-values in the dataset, however, the multilateral specification is best estimated with a Poisson maximum likelihood.
|Date of creation:||Aug 2010|
|Contact details of provider:|| Postal: 1309 East Tenth Street, Room 451, Bloomington, IN 47405-1701|
Web page: http://kelley.iu.edu/bepp/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- J. M. C. Santos Silva & Silvana Tenreyro, 2006.
"The Log of Gravity,"
The Review of Economics and Statistics,
MIT Press, vol. 88(4), pages 641-658, November.
- Joao Santos Silva & Silvana Tenreyro, 2005. "The log of gravity," LSE Research Online Documents on Economics 3744, London School of Economics and Political Science, LSE Library.
- Joao Santos Silva & Silvana Tenreyro, 2005. "The Log of Gravity," CEP Discussion Papers dp0701, Centre for Economic Performance, LSE.
- Santos Silva, J.M.C & Tenreyro, Silvana, 2005. "The Log of Gravity," CEPR Discussion Papers 5311, C.E.P.R. Discussion Papers.
- Alvaro Cuervo-Cazurra, 2008. "The effectiveness of laws against bribery abroad," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(4), pages 634-651, June. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:iuk:wpaper:2010-08. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Rick Harbaugh)
If references are entirely missing, you can add them using this form.