Gravity, trade integration, and heterogeneity across industries

Controlling for Heterogeneity in Gravity Models of Trade and Integration

been common to instead specify the augmented model using per capita income, which captures the same effects.3 Whichever specification of the augmented model is used, the purpose is to allow for non-homothetic preferences in the importing country and to proxy for the capital/labor ratio in the exporting country (Bergstrand, 1989). The gravity model of trade has been used widely as a baseline mod...

Gravity models of trade: unobserved heterogeneity and endogeneity∗

We consider the estimation of the usual Gravity model of trade, which involves flows of trade, say exports, from country i to country j in time period t. We suggest an easy-to-impliment generalised method of moments estimator that avoids the issues associated with the usual fixed effects treatment of the unobserved heterogeneity in this type of models and at the same time provides consistent pa...

The Gravity Model and Iran's Trade Flows

This article has considered the volume and direction of Iran’s trade using the gravity model. The major issue in this analysis is to explore why Iran over or under-traded with the 76 countries relative to the predicted trade flows of the model. The study attempts to explore the reasons from the respect of both the model itself and Iran’s trade structure. This is done by analysing the performanc...

R&D Spillovers, Trade Integration And Expansion Of Trade Flows In East- West Asia And Pacific

Does Labour Productivity Flow Across Industries?: Estimation Robust to Panel Heterogeneity and Cross Sectional Correlation

We consider labour productivity convergence between the US and the UK and France, using industry level data. We find evidence of panel heterogeneity, cross sectional correlation and weak evidence of productivity convergence at the industry level.