LeSage, James P., Fischer, Manfred M. 2020. Cross-sectional dependence model specifications in a static trade panel data setting. Journal of Geographical Systems. 22 (1), 5-46.

RIS

@ARTICLE{LeSage2020,
title = {Cross-sectional dependence model specifications in a static trade panel data setting},
author = {James P. LeSage and Manfred M. Fischer},
year = {2020},
doi = {https://doi.org/10.1007/s10109-019-00298-y},
url = {https://link.springer.com/article/10.1007/s10109-019-00298-y},
volume = {22},
number = {1},
language = {EN},
pages = {5-46},
journal = {Journal of Geographical Systems},
abstract = {The focus is on cross-sectional dependence in panel trade flow models. We propose alternative specifications for modeling time-invariant factors such as sociocultural indicator variables, e.g., common language and currency. These are typically treated as a source of heterogeneity that is eliminated using fixed effects transformations, but we find evidence of cross-sectional dependence after eliminating country-specific and time-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.},
}