Quotation LeSage, James P., Fischer, Manfred M. 2019. Cross-sectional dependence model specifications in a static trade panel data setting. Journal of Geographical Systems. 1-42.


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Abstract

The focus is on cross-sectional dependence in panel trade flow models. We propose alternative specifications for modeling time-invariant factors such as sociocultural indicator variables, e.g., common language and currency. These are typically treated as a source of heterogeneity that is eliminated using fixed effects transformations, but we find evidence of cross-sectional dependence after eliminating country-specific and time-specific effects. These findings suggest use of alternative simultaneous dependence model specifications that accommodate cross-sectional dependence, which we set forth along with Bayesian estimation methods. Ignoring cross-sectional dependence implies biased estimates from panel trade flow models that rely on fixed effects.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Journal of Geographical Systems
Citation Index SSCI
Language English
Title Cross-sectional dependence model specifications in a static trade panel data setting
Year 2019
Page from 1
Page to 42
Reviewed? Y
URL https://link.springer.com/article/10.1007/s10109-019-00298-y
DOI https://doi.org/10.1007/s10109-019-00298-y
Open Access Y
Open Access Link https://link.springer.com/article/10.1007/s10109-019-00298-y
JEL C18, C51, R11

Associations

People
LeSage, James P. (Former researcher)
Fischer, Manfred M. (Details)
Organization
Institute for Economic Geography and GIScience IN (Details)
Research areas (Ă–STAT Classification 'Statistik Austria')
1807 Economic geography (Details)
1810 Geographic Information Systems (GIS) (Details)
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