期刊名称：CORE Discussion Papers / Center for Operations Research and Econometrics (UCL), Louvain
出版年度：2007
卷号：1
出版社：Center for Operations Research and Econometrics (UCL), Louvain
摘要：We propose a quantity-based 'dual' version of the gravity equation that yields an estimating
equation with both cross-sectional interdependence and spatially lagged error terms. Such
an equation can be concisely estimated using spatial econometric techniques. We illustrate
this methodology by applying it to the Canada-U.S. data set used previously, among others,
by Anderson and van Wincoop (2003) and Feenstra (2002, 2004). Our key result is to show
that controlling directly for spatial interdependence across trade flows, as suggested by
theory, significantly reduces border effects because it captures 'multilateral resistance'.
Using a spatial autoregressive moving average specification, we find that border effects
between the U.S. and Canada are smaller than in previous studies: about 8 for Canadian
provinces and about 1.3 for U.S. states. Yet, heterogeneous coefficient estimations reveal
that there is much variation across provinces and states.
