Dear all.
I come to you because of a doubt about the estimate I want to make.
I am using the gravity model to estimate the determinants of Andean Community countries to the European Union countries. Therefore, in the matrix, the origin countries are 4 countries (Andean Community countries) and the destination countries are all the member countries that belong to the European Union (28 countries).
Then, following Yotov et al (2016) in their work "An Advanced Guide to Trade Policy Analysis: The Structural Gravity Model", we should include origin and destination time-varying fixed effects in the panel data as regressors. However, the structure of my panel data (4 origin countries and 28 destination countries) makes me think that I only should include in the estimation origin time-varying fixed effects, but I am not sure.
Similarly, if I want to estimate the gravity equation with origin and destination time-varying fixed effects (not as regressors but as fixed effects), should I only use origin time-varying effects?
Thanks in advance.
Carlos.
I come to you because of a doubt about the estimate I want to make.
I am using the gravity model to estimate the determinants of Andean Community countries to the European Union countries. Therefore, in the matrix, the origin countries are 4 countries (Andean Community countries) and the destination countries are all the member countries that belong to the European Union (28 countries).
Then, following Yotov et al (2016) in their work "An Advanced Guide to Trade Policy Analysis: The Structural Gravity Model", we should include origin and destination time-varying fixed effects in the panel data as regressors. However, the structure of my panel data (4 origin countries and 28 destination countries) makes me think that I only should include in the estimation origin time-varying fixed effects, but I am not sure.
Similarly, if I want to estimate the gravity equation with origin and destination time-varying fixed effects (not as regressors but as fixed effects), should I only use origin time-varying effects?
Thanks in advance.
Carlos.
