Does time difference between countries reduce bilateral trade? An application of the correlated random effects method using panel data

Suryadipta Roy

Applied Economics Letters, 2017, vol. 24, issue 10, 695-698

Abstract: This article implements the correlated random effects (CRE) panel data technique in a gravity framework to analyse the effect of time difference between countries on bilateral trade. One major advantage of the CRE approach over the fixed-effects approach is that it is able to estimate the effect of variables that remain unchanged within panel clusters (e.g. time difference between countries), while these variables get dropped from regressions that use fixed-effects methods. Regression results based on the CRE Poisson pseudo-maximum likelihood estimator indicate statistically significant negative effect of time difference between countries on bilateral trade. An additional hour of time difference between countries is found to reduce bilateral merchandise exports by approximately 8%, even after controlling for the effect of distance in the regressions.

Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/13504851.2016.1221037 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:apeclt:v:24:y:2017:i:10:p:695-698

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEL20

DOI: 10.1080/13504851.2016.1221037

Access Statistics for this article

Applied Economics Letters is currently edited by Anita Phillips

More articles in Applied Economics Letters from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().