I have applied a gravity model in cross sections data to assess the impact of country-level factors on the exposure to risk from a carbon policy.
Exposure to risk is proxied by the bilateral export flows (dependent variable). I have run the OLS estimation with remoteness indexes (to capture MRT effects)but when interpreting the results, the correlation between proxy variable and independent variable is positive while the correlation with the target variable the opposite and somehow seems to be counterfactual. Can someone give any orientation?
Many thanks in advance!
Exposure to risk is proxied by the bilateral export flows (dependent variable). I have run the OLS estimation with remoteness indexes (to capture MRT effects)but when interpreting the results, the correlation between proxy variable and independent variable is positive while the correlation with the target variable the opposite and somehow seems to be counterfactual. Can someone give any orientation?
Many thanks in advance!
