EconPapers    
Economics at your fingertips  
 

Structural Gravity and Fixed Effects

Thibault Fally ()

No 21212, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The gravity equation for trade flows is one of the most successful empirical models in economics and has long played a central role in the trade literature (Anderson, 2011). Different approaches to estimate the gravity equation, i.e. reduced-form or more structural, have been proposed. This paper examines the role of adding-up constraints as the key difference between structural gravity with "multilateral resistance" indexes and reduced-form gravity with simple fixed effects by exporter and importer. In particular, estimating gravity equations using the Poisson Pseudo-Maximum-Likelihood Estimator (Poisson PML) with fixed effects automatically satisfies these constraints and is consistent with the introduction of "multilateral resistance" indexes as in Anderson and van Wincoop (2003).

JEL-codes: C13 C50 F10 F15 (search for similar items in EconPapers)
Date: 2015-05
New Economics Papers: this item is included in nep-ecm and nep-int
Note: ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (117) Track citations by RSS feed

Published as Fally, Thibault, 2015. "Structural gravity and fixed effects," Journal of International Economics, Elsevier, vol. 97(1), pages 76-85.

Downloads: (external link)
http://www.nber.org/papers/w21212.pdf (application/pdf)

Related works:
Journal Article: Structural gravity and fixed effects (2015) Downloads
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:nbr:nberwo:21212

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w21212

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2020-10-14
Handle: RePEc:nbr:nberwo:21212