Gravity Equation and Trade Agreements: A Different Econometric Approach

Authors

  • María Luisa Recalde Universidad Nacional de Córdoba, Facultad de Ciencias Económicas, Instituto de Economía y Finanzas (Córdoba, Argentina)
  • Marcelo Florensa Universidad Nacional de Córdoba, Facultad de Ciencias Económicas, Instituto de Economía y Finanzas (Córdoba, Argentina)
  • Ivan Iturralde Universidad Nacional de Córdoba, Facultad de Ciencias Económicas, Instituto de Economía y Finanzas (Córdoba, Argentina)

DOI:

https://doi.org/10.55444/2451.7321.2008.v46.n2.3853

Keywords:

preferential trade agreements, gravity model, trade creation and trade diversion, generalized lineal models

Abstract

This paper is aimed at multiplicatively estimating the parameters of the gravity equation by using the Poisson Pseudo-Maximum-Likelihood (PPML) estimator, and taking heteroskedasticity into account at the same time. Besides, in order to compare the results, the model will be estimated trough OLS and Tobit, and the precision of the different estimators will be assessed by a set of specification tests. Results indicate that the effects of Preferential Trade Agreements are very sensitive to the method chosen to estimate the gravity model and the results obtained under PPML are the most reliable.

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Published

2008-12-01

Issue

Vol. 46 No. 2 (2008)

Section

ARTÍCULOS

License

Copyright (c) 2008 María Luisa Recalde, Marcelo Florensa, Ivan Iturralde

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How to Cite

Gravity Equation and Trade Agreements: A Different Econometric Approach. (2008). Revista De Economía Y Estadística, 46(2), 83-103. https://doi.org/10.55444/2451.7321.2008.v46.n2.3853