Past focus in the panel gravity literature has been on multidimensional fixed effects specifications in an effort to accommodate heterogeneity. After introducing fixed effects for each origin-
destination dyad and time-period speciffic effects, we find evidence of cross-sectional dependence in flows.
We propose a simultaneous dependence gravity model that allows for network dependence in flows, along with computationally efficient MCMC estimation methods that produce a Monte Carlo integration estimate of log-marginal likelihood useful for model comparison.
Application of the model to a panel of trade flows points to network spillover effects, suggesting
the presence of network dependence and biased estimates from conventional trade flow specifications. / Series: Working Papers in Regional Science
| Identifer | oai:union.ndltd.org:VIENNA/oai:epub.wu-wien.ac.at:6550 |
| Date | 02 October 2018 |
| Creators | LeSage, James P., Fischer, Manfred M. |
| Publisher | WU Vienna University of Economics and Business |
| Source Sets | Wirtschaftsuniversität Wien |
| Language | English |
| Detected Language | English |
| Type | Paper, NonPeerReviewed |
| Format | application/pdf |
| Relation | https://orcid.org/0000-0002-0033-2510, http://epub.wu.ac.at/6550/ |
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