Monte Carlo Appraisals of Gravity Model Specifications

Anderson, Michael; Ferrantino, Michael J.; Schaefer, Kurt C.

doi:10.2139/ssrn.549301

Cited by 8 publications

(3 citation statements)

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“…For gravity models of trade, for instance, Eichengreen and Irwin () and Anderson, Ferrantino, and Schaefer () argue that historical hysteresis between pairs of countries as regards bilateral trade should be accounted for by including time lags of the dependent variable in the r.h.s. of the equation, especially in the absence of fixed effects.…”

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confidence: 99%

What Attracts Knowledge Workers? The Role of Space and Social Networks

Miguélez

Moreno

2013

Journal of Regional Science

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The aim of this paper is to identify the determinants of the geographical mobility of skilled individuals, such as inventors, across European regions. Among a large number of variables, we focus on the role of social proximity between inventors' communities. We use a control function approach to address the endogenous nature of networks, and zero-inflated negative binomial models to accommodate our estimations to the count nature of the dependent variable and the high number of zeros it contains. Our results highlight the importance of physical proximity, job opportunities, social networks, as well as other relational variables in mediating this phenomenon.

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confidence: 99%

What Attracts Knowledge Workers? The Role of Space and Social Networks

Miguélez

Moreno

2013

Journal of Regional Science

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“…Two papers, Anderson et al (2005) and Ghosh and Yamarik (2004), provide strong evidence of overestimation of coefficients in gravity models, as applied widely, and show that results in the literature are sensitive to empirical specification. 14 Anderson et al (2005) run Monte Carlo simulations to show the spurious nature of many large data sets used in gravity model estimations cause significant bias in results. Indeed, many variables are falsely found to be statistically significant in explaining trade due to spurious data.…”

Section: Shortcomings Of the Gravity Modelmentioning

confidence: 99%

Measuring Trade and Trade Potential: A Survey

Armstrong

2007

SSRN Journal

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This paper provides a survey and a brief critical review of the literature on the widely used gravity models of trade, as a prelude to the justification of its use with the stochastic frontier methodology. The important papers on the theoretical foundations of the gravity model are reviewed and related to papers applied to explain determinants of trade flows. Then some shortcomings of the gravity model are discussed. The paper introduces the stochastic frontier gravity model as a way of estimating trade resistances and overcoming some of the shortcomings of conventional gravity models in their use for that purpose.

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“…Lastly, the aim of undertaking comparative statics of trade costs with trade growth under the absence of information on all components of bilateral trade costs is also not properly achieved (Kalirajan and Bhattacharya (2007); Ferrantino et al (2005); Baldwin and Taglioni(2006); Kalirajan and Khan (2011)).…”

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confidence: 99%

On the “Frontier” Estimation of the “Inverse” Gravity Model

Shankar¹

2015

The Indian Economic Journal

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Monte Carlo Appraisals of Gravity Model Specifications

Cited by 8 publications

References 10 publications

What Attracts Knowledge Workers? The Role of Space and Social Networks

What Attracts Knowledge Workers? The Role of Space and Social Networks

Measuring Trade and Trade Potential: A Survey

On the “Frontier” Estimation of the “Inverse” Gravity Model

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