Commands for exponential trade gravity model with PPML

[Kayleen nathanie]

Hello.. I am currently doing my final thesis about trade performance based on export and institutional quality data using a trade gravity model.

My model is:
export _{IDj t} = exp ( a₀ + b₁ Institutional_{ID t-1} + b₂ lnDistance_{ID j} + b₃ CONTIG_{ID j} + b₄ COMLANG_{ID j} + b₅ lnGDP_{j t} + b₆ LabourComp_{ID t} + b₇ FTA_{ID j t} ) n_{ID j t}

Im very confused what is the command for my model in stata, should I include exp command when running PPML command or not.

is it enough if I only use:
ppml export Institutional lnDistance CONTIG COMLANG lnGDP LabourComp FTA

or should I transform each variable into exponential with exp(x) first? and then do the regression, so the command will be:
ppml export exp_institutional exp_lnDistance exp_CONTIG exp_COMLANG exp_lnGDP exp_LabourComp exp_FTA

or is there any commands I can use?

I need help, thank you so much..

[Maxence Morlet]

If you have fixed effects,

ssc install ppmlhdfe

You may want to cluster standard errors as well, option: cluster(clustvar)

[Kayleen nathanie]

Thank you so much. I have a trouble when I generate exponential for labour competitiveness, which shows all values missing. Why that happens?

[Maxence Morlet]

I would not exponentiate the variables. Use them in level form, unless you really need to log them.

By the way, I saw in your code "exp_lnGDP"; exponent of ln is 1, and ln of exponent is 1 as well.