Browsing by Subject "Panel gravity model"

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The effect of culture on trade over time : new evidence from the GLOBE data set
(2018) Frank, Jonas
In this essay I use the GLOBE research study by House et al. (2013) as a proxy for measuring cultural distance. Unlike other studies, GLOBE introduces nine cultural dimensions and focuses exclusively on managers, allowing for a distinct glimpse into the values of people actually making trade decisions. I make use of a state-of-the-art PPML approach using data on international trade flows together with intra-national trade flows (Yotov, 2012) and a comprehensive set of fixed effects to consistently es- timate a gravity equation using a panel from 1995 to 2004. I distinguish between different industries by following the goods classiffcation introduced by Rauch (1999). The results show that cultural differences indeed affect trade values differently over time, but their size and impact depends on the chosen measure of cultural distance and on the industry classification.
The effect of transfer pricing regulations on intra-industry trade
(2017) Dekker, Vincent; Strohmaier, Kristina
We analyse the effect of transfer pricing regulations on trade ows. We base our estimation on a panel gravity model, where the transfer pricing regulations are modeled as trade costs. To abstract from any aggregate demand shocks, we focus on intermediate goods in the car industry. Our results suggest a significant volume effect on the exported quantity as a result of the introduction of transfer pricing laws in the exporting country. Exports to lower tax rate countries are reduced, whilst exports to higher tax rate countries are increased. In line with theory, transfer pricing regulations only play a role if a tax rate difference exists between the trading partners.
The effects of economic sanctions on trade : new evidence from apanel PPML gravity approach
(2018) Frank, Jonas
Economic sanctions are a popular diplomatic tool for countries to enforce political demands abroad or to punish non-complying countries. There is an ongoing debate in the literature about whether this tool is effective in reaching these goals. This paper looks at the consequences of sanctions for bilateral trade values between 1987 and 2005. In order to quantify the direct effects of sanctions on the trade flows between countries I use PPML as well as several other econometric specifications to estimate the gravity equation with country pair, sender-time, and target-time fixed effects. Following Heid et al. (2015) I include intra-national as well as international trade flows, to reduce the endogeneity bias of trade policy instruments. The estimates reveal that there is a signifucant decrease in the value of trade after the introduction of sanctions, which turns out to be driven by moderate sanctions. I also check whether countries that are affected by sanctions switch to other trade partners, but here is no robust evidence for behavior like this.