Structural gravity with dummies only: Constrained ANOVA-type estimation of gravity models
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Standard gravity variables do well in predicting relative trade costs but fail to capture the level of bilateral trade costs (under-predict for poor countries and over-predict for more developed countries).
“As demonstrated by Egger and Nigai (2015) and Agnosteva et al. (2019), the 'standard gravity variables' (e.g., distance, contiguity, etc.) do well in predicting relative trade costs, however, they fail to capture the level of bilateral trade costs (e.g., they under-predict the bilateral trade costs for the poor countries and over-predict them for the more developed countries).”
From Estimating the effects of trade agreements: Lessons from 60 years of methods and data (2024) · cites this paper as Egger and Nigai (2015)
Cites
Anderson, J. E., & van Wincoop, E. (2004) · Journal of Economic Literature · doi:10.1257/0022051042177649 · Cited by 2,524 · see citing works
Estimating Trade Flows: Trading Partners and Trading Volumes <sup>*</sup>
Helpman, E., Melitz, M., & Rubinstein, Y. (2008) · Quarterly Journal of Economics · doi:10.1162/qjec.2008.123.2.441 · Cited by 2,436 · see citing works
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Estimating the effects of trade agreements: Lessons from 60 years of methods and data
Larch, M., & Yotov, Y. V. (2024) · The World Economy · doi:10.1111/twec.13569 · Cited by 56 · see citing works
- Authors
- Egger, P. H., & Nigai, S.
- Affiliations
- Austrian Institute of Economic Research (AT)
- ETH Zurich (CH)
- Corresponding author
- Egger, Peter H.
- Venue
- Journal of International Economics
- Publisher
- Elsevier BV
- Published
- 2015-09
- Volume
- 97
- Issue
- 1
- Pages
- 86-99
- ISSN
- 0022-1996 (ISSN-L)
- OpenAlex
- W579274652
- Cited by
- 201
- References
- 2
- Citations by year
- 2026: 17 · 2025: 32 · 2024: 26 · 2023: 35 · 2022: 23 · 2021: 23 · 2020: 18 · 2019: 6 · 2018: 11 · 2017: 6 · 2016: 1 · 2015: 3
- FWCI
- 19.17
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- Journal of International Economics (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Funders
- Czech Science Fund (P402/12/0982)
- Topics
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic and Technological Innovation
- Social Sciences › Business, Management and Accounting › Strategy and Management › Global Trade and Competitiveness
- Keywords
- gravity model, trade costs, endogeneity, country-specific effects, fixed effects, two-stage estimation, partial effects, trade flows
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