The formulation and estimation of random effects panel data models of trade

Matyas, Laszlo and Hornok, Cecilia and Pus, Daria (2012): The formulation and estimation of random effects panel data models of trade.

Abstract

The paper introduces for the most frequently used three-dimensional panel data sets several random effects model specifications. It derives appropriate estimation methods for the balanced and unbalanced cases. An application is also presented where the bilateral trade of 20 EU countries is analysed for the period 2001-2006. The differences between the fixed and random effects specifications are highlighted through this empirical exercise.

• Item Type: MPRA Paper
• Language: English
• Keywords: panel data; multidimensional panel data; random effects; error components model; trade model; gravity mode
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C13 - Estimation: General; F - International Economics > F1 - Trade > F11 - Neoclassical Models of Trade; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models; F - International Economics > F1 - Trade > F17 - Trade Forecasting and Simulation; F - International Economics > F1 - Trade; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C21 - Cross-Sectional Models ; Spatial Models ; Treatment Effect Models ; Quantile Regressions; C - Mathematical and Quantitative Methods > C0 - General > C01 - Econometrics

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