Quotation LeSage, James P., Fischer, Manfred M. 2018. Cross-sectional dependence model specifications in a static trade panel data setting. 12th World Congress of the RSAI, Goa, Indien, 29.05.-01.06.2018.




The focus is on cross-sectional dependence in panel trade flow models. We propose alternative specifications for modeling time invariant factors such as socio-cultural indicator variables, e.g., common language and currency. These are typically treated as a source of heterogeneity eliminated using fixed effects transformations, but we find evidence of cross-sectional dependence after eliminating country-specific effects. These findings suggest use of alternative simultaneous dependence model specifications that accommodate cross-sectional dependence, which we set forth along with Bayesian estimation methods. Ignoring cross-sectional dependence implies biased estimates from panel trade flow models that rely on fixed effects.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Paper presented at an academic conference or symposium
Language English
Title Cross-sectional dependence model specifications in a static trade panel data setting
Event 12th World Congress of the RSAI
Year 2018
Date 29.05.-01.06.2018
Country India
Location Goa
URL http://regionalscience.org/2018worldcongress/
JEL JEL C18, C51, R11


LeSage, James P. (Former researcher)
Fischer, Manfred M. (Details)
Institute for Economic Geography and GIScience IN (Details)
Research areas (Ă–STAT Classification 'Statistik Austria')
1807 Economic geography (Details)
5323 Econometrics (Details)
5618 Regional economy (Details)
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