This paper compares various specifications of the gravity model of trade as nested versions of a general specification that uses bilateral country-pair fixed effects to control for heterogeneity. For each specification, we show that the atheoretical restrictions used to obtain them from the...

This paper compares various specifications of the gravity model of trade as nested versions of a general specification that uses bilateral country-pair fixed effects to control for heterogeneity. For each specification, we show that the a theoretical restrictions to obtain them from the general...

Traditional literature takes gravity variables, regional economic agreement formation, and economy similarity as exogenous variables when discussing the determinants of the bilateral trade flows. This research uses the bilateral trade information from 1986 to 2008 and the common types of trade...

This paper compares various specifications of the gravity model of trade which are commonly used in the literature. It shows that most of them can be regarded as nested versions of a general specification in which the heterogeneity of bilateral country-pair fixed effects is accounted for. This...

The objective of this paper is to examine the effects of political asymmetries on a FTA and a CU. I have shown that either a higher lobbying sensitivity to the foreign firm or a more susceptibility of politicians to lobbying are sufficient to lead to a higher tariff protection at the individual...

This paper argues that it is necessary to allow for country-pair heterogeneity when using the gravity model to estimate international trade flows. We propose and estimate a fixed-effects model that eliminates the heterogeneity bias inherent in standard methods. Further, we show that there is no...