The objective of this study has been to analyze the sensitivity of trade flow to trade barriers from gravity equations, using different econometric techniques recently highlighted in the literature. Specifically, we compare a benchmark OLS fixed effects specification a la Feenstra (2002), with three emerging estimation methods: the standard Heckman correction for selection bias, to account for zero trade flow; its extension, recently proposed by Helpman et al. (2008), to control for firm heterogeneity; and, finally, the Poisson pseudo-maximum-likelihood (PPML) technique to correct for the presence of heteroskedasticity, first proposed by Santos Silva and Tenreyro (2006). Our gravity model includes trade among 211 exporter and 104 importer countries, in 18 food industry sectors.

Elasticity of trade flows to trade barriers : A comparison among emerging estimation techniques / A. Olper, V. Raimondi - In: Elasticity of Trade Flow to Trade Barriers : A Comparison among Emerging Estimation Techniques / A. Olper, V. Raimondi. - Roma : Aracne, 2008. - ISBN 9788854819023. (( Intervento presentato al 12. convegno 2008 EAAE Congress People, Food and Environments : Global Trends and European Strategies tenutosi a Ghent, Belgium nel 2008.

Elasticity of trade flows to trade barriers : A comparison among emerging estimation techniques

A. Olper
Primo
;
V. Raimondi
Ultimo
2008

Abstract

The objective of this study has been to analyze the sensitivity of trade flow to trade barriers from gravity equations, using different econometric techniques recently highlighted in the literature. Specifically, we compare a benchmark OLS fixed effects specification a la Feenstra (2002), with three emerging estimation methods: the standard Heckman correction for selection bias, to account for zero trade flow; its extension, recently proposed by Helpman et al. (2008), to control for firm heterogeneity; and, finally, the Poisson pseudo-maximum-likelihood (PPML) technique to correct for the presence of heteroskedasticity, first proposed by Santos Silva and Tenreyro (2006). Our gravity model includes trade among 211 exporter and 104 importer countries, in 18 food industry sectors.
Gravity model ; Trade Elasticity ; Food trade
Settore AGR/01 - Economia ed Estimo Rurale
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2434/56938
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