Dear All,
i am working on gravity model for my master thesis : impact of Nonreciprocal preferential trade agreement on SSA
export at HS 2 digit product level to OECD countries. i am comparing the results of OLS and PPML with fixed effects and observed a positive and significant estimate for log (tariff +1). i am confused with such tariff results, can anyone help explain what is happening and why is it so, thank you.
Standard errors in parentheses
* p < 0.10, ** p < 0.05, *** p < 0.01
i am working on gravity model for my master thesis : impact of Nonreciprocal preferential trade agreement on SSA
export at HS 2 digit product level to OECD countries. i am comparing the results of OLS and PPML with fixed effects and observed a positive and significant estimate for log (tariff +1). i am confused with such tariff results, can anyone help explain what is happening and why is it so, thank you.
| OLS | OLS | PPML1 | PPML | |
| FE | FE | |||
| NR-PTA | 1.02*** | 0.36*** | 1.05*** | 0.42*** |
| (0.06) | (0.05) | (0.12) | (0.10) | |
| R-PTA | 0.56*** | 0.46*** | 0.90*** | 1.19*** |
| (0.08) | (0.07) | (0.21) | (0.10) | |
| Tariff +1 | 0.12*** | -0.00 | 0.04 | 0.11** |
| (0.02) | (0.03) | (0.04) | (0.04) | |
| ln_DIST | -0.38*** | -1.13*** | -0.21** | -0.64*** |
| (0.03) | (0.03) | (0.09) | (0.05) | |
| Contiguity | 1.67*** | 0.78*** | 1.02*** | 0.61*** |
| (0.12) | (0.10) | (0.21) | (0.10) | |
| Common Lang. | 0.24*** | 0.21*** | -0.09 | -0.13 |
| (0.08) | (0.06) | (0.14) | (0.08) | |
| Colonial ties | 0.61*** | 0.94*** | 0.08 | 0.53*** |
| (0.11) | (0.08) | (0.12) | (0.10) | |
| ln_Y | 0.55*** | 0.47*** | ||
| (0.01) | (0.02) | |||
| ln_E | 0.53*** | 0.68*** | ||
| (0.02) | (0.04) | |||
| Constant | -20.25*** | 14.62*** | -20.92*** | |
| (0.56) | (0.31) | (1.45) | ||
| Observations | 59963 | 60507 | 59963 | 142775 |
| Adjusted R2 | 0.212 | 0.658 |
* p < 0.10, ** p < 0.05, *** p < 0.01
