Exporting Spatial Externalities
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.
KeywordsExternalities Exports Distance Spatial econometrics Russia
JEL ClassificationC21 F14 R14
Thanks to three anonymous referees and the editor for excellent comments as well as Ben Cowan, Tim Graciano, Tom Marsh, Yelena Tuzova, and the participants at many departmental seminars and conferences. Cassey thanks Pavan Dhanireddy for research assistance. Cassey acknowledges financial support from Washington State University Agricultural Research Center project # 0540.
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