Structural Interactions in Spatial Panels

Arnab Bhattacharjee and Sean Holly

No 2009-39, SIRE Discussion Papers from Scottish Institute for Research in Economics (SIRE)

Abstract: Until recently, much effort has been devoted to the estimation of panel data regression models without adequate attention being paid to the drivers of diffusion and interaction across cross section and spatial units. We discuss some new methodologies in this emerging area and demonstrate their use in measurement and inferences on cross section and spatial interactions. Specifically, we highlight the important distinction between spatial dependence driven by unobserved common factors and those based on a spatial weights matrix. We argue that, purely factor driven models of spatial dependence may be somewhat inadequate because of their connection with the exchangeability assumption. Limitations and potential enhancements of the existing methods are discussed, and several directions for new research are highlighted.

Keywords: Spatial Weights Matrix; Cross Sectional and Spatial Dependence; Interactions and Diffusion; Monetary Policy Committee; Generalised Method of Moments (search for similar items in EconPapers)
Date: 2009
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Related works:
Journal Article: Structural interactions in spatial panels (2011)
Working Paper: Structural Interactions in Spatial Panels (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:edn:sirdps:94

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