Exporting Spatial Externalities
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- Cassey, A.J., Schmeiser, K.N. & Waldkirch, A. Open Econ Rev (2016) 27: 697. doi:10.1007/s11079-016-9394-z
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Using spatial econometrics, we estimate the effect of externalities generated by neighbors’ exports on place-level exports, explicitly modeling the distance to those neighbors. We find there is a positive effect of neighbors’ exports on exports to the same country but less so for exporting generally. We also find that using a spatial-weights term based on the physical distance between exporters greatly outperforms a dichotomous measure based on exporters in the same region. The results are robust to alternative definitions of the spatial weight.