relation: https://publications.ut-capitole.fr/id/eprint/44014/
title: Instrumental-Variable Estimation Of Exponential Regression Models With Two-Way Fixed Effects With An Application To Gravity Equations
creator: Jochmans, Koen
creator: Verardi, Vincenzo
subject: B- ECONOMIE ET FINANCE
description: This paper introduces instrumental-variable estimators for exponential-regression models that feature two-way fixed effects. These techniques allow us to develop a theory-consistent approach to the estimation of cross-sectional gravity equations that can accommodate the endogeneity of policy variables. We apply this approach to a data set in which the policy decision of interest is the engagement in a free trade agreement. We explore ways to exploit the transitivity observed in the formation of trade agreements to construct instrumental variables with considerable predictive ability. Within a bilateral model, the use of these instruments has strong theoretical foundations. We obtain point estimates of the partial effect of a preferential-trade agreement on trade volume that range between 20% and 30% and find no statistical evidence of endogeneity.
publisher: TSE Working Paper
date: 2021-11-19
type: Monograph
type: NonPeerReviewed
format: text
language: en
identifier: https://publications.ut-capitole.fr/id/eprint/44014/1/wp_tse-1271.pdf
identifier:   Jochmans, Koen <https://www.idref.fr/175871108> and Verardi, Vincenzo  (2021) Instrumental-Variable Estimation Of Exponential Regression Models With Two-Way Fixed Effects With An Application To Gravity Equations.  TSE Working Paper, n. 21-1271, Toulouse     
relation: http://tse-fr.eu/pub/126195
language: en