Reconciling conflicting evidence on the origins of comparative development: A finite mixture model approach
In this paper, I revisit the controversy over the fundamental sources of comparative development. In contrast to much of the previous literature, my focus is on the appropriate specification of the empirical strategy. Using a finite mixture model approach and Monte Carlo simulations, I demonstrate that the standard linear estimation strategy may be mis-specified and as a result is likely to obscure the true effects of the variables used to explain cross-country income differences. My findings could potentially reconcile apparently conflicting results from the existing literature on the role of geography and institutions in comparative development.
Year of publication: |
2013-08
|
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Authors: | McDermott, Thomas K.J. |
Institutions: | Grantham Research Institute on Climate Change and the Environment, London School of Economics (LSE) |
Saved in:
freely available
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