Estimating Cross-Industry Cross-Country Interaction Models Using Benchmark Industry Characteristics

Antonio Ciccone and Elias Papaioannou

No 22368, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Empirical cross-industry cross-country models are applied widely in economics, for example to investigate the determinants of economic growth or international trade. Estimation generally relies on US proxies for unobservable technological industry characteristics, for example industries' dependence on external finance or relationship-specific inputs. We examine the properties of the estimator and find that estimates can be biased towards zero (attenuated) or away from zero (amplified), depending on how technological similarity with the US covaries with other country characteristics. We also develop an alternative estimator that yields a lower bound on the true effect in cross-industry cross-country models of comparative advantage.

JEL-codes: F10 G30 O40 (search for similar items in EconPapers)
Date: 2016-06
New Economics Papers: this item is included in nep-ecm and nep-tid
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Citations: View citations in EconPapers (17)

Published as Antonio Ciccone & Elias Papaioannou, 2022. "Estimating Cross-Industry Cross-Country Interaction Models Using Benchmark Industry Characteristics," The Economic Journal, vol 133(649), pages 130-158.

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Related works:
Journal Article: Estimating Cross-Industry Cross-Country Interaction Models Using Benchmark Industry Characteristics (2023)
Working Paper: Estimating Cross-Industry Cross-Country Interaction Models Using Benchmark Industry Characteristics (2019)
Working Paper: Estimating Cross-Industry Cross-Country Interaction Models Using Benchmark Industry Characteristics (2019)
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