The estimation of gravity models in international trade

Badi H. Baltagi, Peter H. Egger, Katharina Erhardt

Research output: Chapter in Book/Entry/PoemChapter

12 Scopus citations

Abstract

Over the last few decades, multi-indexed data on trade, multinational activity, and even migration have become available. By far the most prominent application of multi-dimensional data in the context of international economics is the estimation of the famous gravity equation of international trade, where bilateral export or import volume (or foreign direct investment stock or migration stock) is the dependent variable of interest. This chapter provides a survey of empirical issues in gravity-model estimation from a panel econometric perspective. It sets off with a generic illustration of the theoretical foundations of gravity equations and proceeds with the modelling of the multi-dimensional stochastic structure, focusing on fixed-effects estimation.

Original languageEnglish (US)
Title of host publicationAdvanced Studies in Theoretical and Applied Econometrics
PublisherSpringer
Pages323-348
Number of pages26
DOIs
StatePublished - 2017

Publication series

NameAdvanced Studies in Theoretical and Applied Econometrics
Volume50
ISSN (Print)1570-5811
ISSN (Electronic)2214-7977

ASJC Scopus subject areas

  • Economics and Econometrics

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