Santos Silva, Joao and Tenreyro, Silvana 
ORCID: 0000-0002-9816-7452
(2013)
Trading partners and trading volumes: implementing the Helpman-Melitz-Rubinstein model empirically.
Oxford Bulletin of Economics and Statistics, 77 (1).
pp. 93-105.
ISSN 0305-9049
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Abstract
Helpman, Melitz and Rubinstein [Quarterly Journal of Economics (2008) Vol. 123, pp. 441–487] (HMR) present a rich theoretical model to study the determinants of bilateral trade flows across countries. The model is then empirically implemented through a two-stage estimation procedure. We argue that this estimation procedure is only valid under the strong distributional assumptions maintained in the article. Statistical tests using the HMR sample, however, clearly reject such assumptions. Moreover, we perform numerical experiments which show that the HMR two-stage estimator is very sensitive to departures from the assumption of homoskedasticity. These findings cast doubts on any inference drawn from the empirical implementation of the HMR model.
| Item Type: | Article |
|---|---|
| Official URL: | http://onlinelibrary.wiley.com/journal/10.1111/%28... |
| Additional Information: | © 2013 The Department of Economics, University of Oxford and John Wiley & Sons Ltd |
| Divisions: | Economics Centre for Economic Performance |
| Subjects: | H Social Sciences > HB Economic Theory |
| Date Deposited: | 22 Jan 2014 12:32 |
| Last Modified: | 04 Apr 2024 21:12 |
| Projects: | PEst-OE/EGE/UI0491/2013, 240852 |
| Funders: | Fundação para a Ciência e Tecnologia, European Research Council |
| URI: | http://eprints.lse.ac.uk/id/eprint/55398 |
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Trading partners and trading volumes: implementing the Helpman-Melitz-Rubinstein model empirically. (deposited 14 Oct 2009 11:48)
- Trading partners and trading volumes: implementing the Helpman-Melitz-Rubinstein model empirically. (deposited 22 Jan 2014 12:32) [Currently Displayed]
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