Quotation Krisztin, Tamas, Fischer, Manfred M. 2015. The gravity model for international trade: Specification and estimation issues. Spatial Economic Analysis 10 (4), 451-470.


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Abstract

The Poisson gravity model along with pseudo maximum likelihood (ML) methods has become a popular way to model international trade flows. This approach has several econometric advantages that we outline in the paper. We argue that estimating the parameters by ML would only be justified statistically if the trade flows were independent. Such an assumption, however, is generally not valid, and a failure to account for spatial dependence may lead to biased parameter estimates and misleading inferences. To overcome this estimation problem we suggest eigenvector spatial filtering variants of the Poisson gravity model (without and with zero-inflation) along with pseudo ML estimation.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Spatial Economic Analysis
Citation Index SSCI
WU-Journal-Rating new VW-D
Language English
Title The gravity model for international trade: Specification and estimation issues
Volume 10
Number 4
Year 2015
Page from 451
Page to 470
DOI http://dx.doi.org/10.1080/17421772.2015.1076575

Associations

People
Krisztin, Tamas (Former researcher)
Fischer, Manfred M. (Details)
Organization
Research Institute for Supply Chain Management FI (Details)
Institute for Economic Geography and GIScience IN (Details)
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