Advertisement

The Estimation of Gravity Models in International Trade

  • Badi H. Baltagi
  • Peter H. Egger
  • Katharina Erhardt
Chapter
Part of the Advanced Studies in Theoretical and Applied Econometrics book series (ASTA, volume 50)

Abstract

Over the last few decades, multi-indexed data on trade, multinational activity, and even migration have become available. By far the most prominent application of multi-dimensional data in the context of international economics is the estimation of the famous gravity equation of international trade, where bilateral export or import volume (or foreign direct investment stock or migration stock) is the dependent variable of interest. This chapter provides a survey of empirical issues in gravity-model estimation from a panel econometric perspective. It sets off with a generic illustration of the theoretical foundations of gravity equations and proceeds with the modelling of the multi-dimensional stochastic structure, focusing on fixed-effects estimation.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Copyright information

© Springer International Publishing AG 2017

Authors and Affiliations

  • Badi H. Baltagi
    • 1
  • Peter H. Egger
    • 2
  • Katharina Erhardt
    • 3
  1. 1.Syracuse UniversityNew YorkUSA
  2. 2.ETH Zurich, CEPR, and CESifoZurichSwitzerland
  3. 3.ETH ZurichZurichSwitzerland

Personalised recommendations