Estimating the Extensive Margin of Trade
João Santos Silva (),
Silvana Tenreyro () and
No 10787, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Understanding and quantifying the determinants of the number of sectors or firms exporting in a given country is of relevance for the assessment of trade policies. Estimation of models for the number of sectors, however, poses a challenge because the dependent variable has both a lower and an upper bound, implying that the partial effects of the explanatory variables on the conditional mean of the dependent variable cannot be constant and must approach zero as the conditional mean approaches its bounds. We argue that ignoring these bounds can lead to erroneous conclusions due to the model's mispecification, and propose a flexible specification that accounts for the doubly-bounded nature of the dependent variable. We empirically investigate the problem and the proposed solution, finding significant differences between estimates obtained with the proposed estimator and those obtained with standard approaches.
Keywords: bounded data; extensive margin of trade; number of sectors (search for similar items in EconPapers)
JEL-codes: C13 C25 F11 F14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ger and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at firstname.lastname@example.org
Journal Article: Estimating the extensive margin of trade (2014)
Working Paper: Estimating the extensive margin of trade (2014)
Working Paper: Estimating the Extensive Margin of Trade (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:10787
Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... rs/dp.php?dpno=10787
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().