The proper panel econometric specification of the gravity equation: A three-way model with bilateral interaction effects

By Peter H. Egger, Michael Pfaffermayr. 2003

484 citations recorded by the source corpus.

View Paper: https://www.semanticscholar.org/paper/0a9977f09ab0f35de962d88bc09fbf22f39f8d78

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

Citations in the corpus

Panel Data Gravity Models of International Trade (2014, unknown): “Such procedures have been applied in the context of bilateral trade flow models by Behrens, Ertur, and Koch (2012) and for foreign direct investment by Baltagi, Egger, and Pfaffermayr (2007, 2008). spatial econometric model which involves weighted bilateral exports of other pairs as a determinant of”
Trade Integration of Central and Eastern European Countries: Lessons from a Gravity Model (2005, unknown): “Egger (2003) and Fidrmuc and Fidrmuc (2003) found that trade between the EU15 and the CEE countries was close to the predicted level at the end of the 1990s.”
Do low corporate income tax rates attract FDI? – Evidence from Central- and East European countries (2009, background): “Concerning time effects we consider these to be fixed as they are likely to be correlated with gdphome and gdphost as time dummies account inter alia for the business cycle and for common shocks (Egger and Pfaffermayr, 2003).”
On the bilateral trade effects of free trade agreements between the EU-15 and the CEEC-4 countries (2009, unknown): “equation is the same as ( 14 ) with the Accijt dummy now defined as explained above.”
Evidence on Changes in Aid Allocation Criteria (2009, result): “Egger and Pfaffermayr (2003) show that this generalization of the three-way model is identical to a two-way model with only time and bilateral effects, which is what is estimated in this article.”
Revisiting the effects of regional trade agreements on trade flows with proper specification of the gravity model (2006, unknown): “However, it turns out that this panel specification, with three specific effects (exporter, importer and time effects) is only a restricted version of a more general model which allows for country pair heterogeneity (e.g., Cheng and Wall, 1999; Egger and Pfaffermayr, 2003).”
Exchange Rate Volatility and Exports: New Empirical Evidence from the Emerging East Asian Economies (2010, unknown): “However, Egger and Pfaffermayr (2003) show that instead of having one dummy variable per country, individual country-pair dummies (fixed effects) and time dummies to control for common shocks should be used to get efficient estimators.”
Estimation of the Gravity Equation in the Presence of Zero Flows (2006, background): “These deal with, for example, the specification of panel gravity equations, the estimation of cross-section gravity equations, and the correct interpretation of the distance effect on patterns of bilateral trade (e.g., Buch et al., 2004, Egger, 2000, Egger and Pfaffermayr, 2005, and Matyas, 1998).”