A fast, easy, and efficient estimator for the trade flux between heterogeneous economies

Robert Aurelian Sova () and Anamaria Diana Sova

MPRA Paper from University Library of Munich, Germany

Abstract: Compared 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.

Keywords: international trade; POLS estimators; individual heterogeneity; fixed effects; random effects (search for similar items in EconPapers)
JEL-codes: F15 C23 F12 (search for similar items in EconPapers)
Date: 2007-03-05
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