Gravity model estimation: fixed effects vs. random intercept Poisson pseudo-maximum likelihood

Prehn, Sören; Brümmer, Bernhard; Glauben, Thomas

doi:10.1080/13504851.2015.1105916

Cited by 26 publications

(16 citation statements)

References 10 publications

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“…The remaining variables were little bit affect. The results are according to the literature (Anderson, 2011;Batra, 2006;De, 2013;Faustino and Proença, 2011;Kabir and Salim, 2010;Leitao and Tripathi, 2013;Prehn et al, 2016;Ranajoy et al, 2006). The results conclude that local sizes of economy enhance export, import and bilateral trade; while international economic mass is important for Pakistan; trade decreases when distance between two partners increases.…”

Section: Discussionsupporting

confidence: 80%

Pakistan’s Trade and Trading Partners Using Gravity Model: A Static and Dynamic Panel Data

Ullah¹,

Kiani²,

Imran³

2019

JBR

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This paper examines Pakistans trade flows using a gravity model for the period 2002-2015. We have selected the following major trade partners: China, UAE, Saudi Arab, United States, Kuwait, Malaysia, Japan, India, Singapore, Afghanistan and Iran. In this research, we employed static and dynamic econometric approaches. The results from the two approaches are similar, which showed economic size and distance have played a crucial role in bilateral trade. Furthermore, political globalization was found to be significant and played a vital role during the study period. These variables confirm that the theoretical models, Pakistan and Pakistan trade partner with economic masses, political globalization, and distance strongly effect trade liaison

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Section: Discussionsupporting

confidence: 80%

Pakistan’s Trade and Trading Partners Using Gravity Model: A Static and Dynamic Panel Data

Ullah¹,

Kiani²,

Imran³

2019

JBR

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“…The former is used to surmount the problem of the traditional pooled cross-section method unable to cope with bilateral (exporter and/or importer) heterogeneity (Cheng & Wall, 2005;Anderson & Wincoop, 2003). However, this approach does not allow for the inclusion of key exporter and importer invariant factors, and subsequently excludes important economically relevant trade variables (Prehn et al, 2016). As our main focus is on time-constant variables, such as the Great Mekong Sub-region Cooperation, dummies indicating GMS member countries, and the geographical distance from Vietnam to its trading partners, the random-effects is more appropriate.…”

Section: Empirical Results -Baseline Regressionsmentioning

confidence: 99%

“…As our main focus is on time-constant variables, such as the Great Mekong Sub-region Cooperation, dummies indicating GMS member countries, and the geographical distance from Vietnam to its trading partners, the random-effects is more appropriate. Therefore, we follow the literature (Kavallari et al, 2008;Keum, 2010;Prehn et al, 2016) and employ a panel random-effects approach to evaluate the trade flows between…”

Section: Empirical Results -Baseline Regressionsmentioning

confidence: 99%

Economic Cooperation in the Greater Mekong Sub-Region

Nguyen²,

Vu³

et al. 2020

Journal of Economic Integration

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This paper investigates the impact of regional economic cooperation between Vietnam and its partners during the 2000-2015 period, focusing on the Greater Mekong Sub-region (GMS). Overall, the GMS represents a significant portion of Vietnam's trade portfolio. China is the dominant trading partner in the GMS, exhibiting strong influence over Vietnam's trade, especially its imports. However, using the gravity model of trade, we find that Vietnam has not benefited from GMS cooperation, as exemplified by its significant trade deficit, particularly with China. We further find that human capital enhancement and financial development are key factors to facilitate Vietnam's trade, and mitigate its trade deficit with other GMS member countries. To this end, this study provides some important policy implications for the Vietnamese government as well as policymakers in other countries, when trading with larger partners in the context of regional economic cooperation.

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“…However, some variables, such as distance lnðDistanceÞ and language (Language), will not change for any nation over time. Thus, the fixed-effect model is not appropriate when these variables are included (Liu, Lai, & Chen, 2012;Prehn, Brümmer, & Glauben, 2016). 2 As such, the random effect model is favoured under such circumstances.…”

Section: Results Of Model Estimationmentioning

confidence: 99%

The effect of China's open-door tourism policy on Taiwan: Promoting or suppressing tourism from other countries to Taiwan?

Liou

Hsu

2020

Tourism Management

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A B S T R A C TThis study employs an extended gravity model to analyse the complementarity or competitiveness relationship of the number of inbound tourists and corresponding tourism revenue between China and 19 other nations under the implementation of China's Open-door Tourism Policy to Taiwan in 2008. A simulation for 2018-2021 demonstrates the sustained impact of this policy. The results show that the number of tourists to Taiwan from China reached its peak in 2015 at 41% and will decrease to 9% by 2021. The corresponding tourism revenue will decrease from 49% to 11% over the same period. The results also show that if the number of tourists from China remains above 836,772, the number of tourists from Japan, Hong Kong, Australasia, North America, and Europe will still increase. However, the number of tourists from South Korea and South and Southeast Asia will increase continuously regardless of tourists from China, even far below 836,772.

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Gravity model estimation: fixed effects vs. random intercept Poisson pseudo-maximum likelihood

Cited by 26 publications

References 10 publications

Pakistan’s Trade and Trading Partners Using Gravity Model: A Static and Dynamic Panel Data

Pakistan’s Trade and Trading Partners Using Gravity Model: A Static and Dynamic Panel Data

Economic Cooperation in the Greater Mekong Sub-Region

The effect of China's open-door tourism policy on Taiwan: Promoting or suppressing tourism from other countries to Taiwan?

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