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Modelling bilateral intra-industry trade indexes with panel data: a semiparametric approach

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  • Isabel Proença
  • Horácio Faustino

Abstract

This paper focuses on the modelling of bilateral intra-industry trade indexes with panel data, applying a semiparametric approach. This extends the work of Papke and Wooldridge (J Econom 145:121–133, 2008 ) for fractional responses, by introducing a nonparametric component to control for unobserved heterogeneity associated with the regressors. The proposed approach is based on the semi-mixed effects generalised linear model of Lombardía and Sperlich (Comput Stat Data Anal 56:2903–2917, 2012 ), introduced in the context of small area statistics, and the semiparametric gravity model of Proença et al. (Empir Econ doi: 10.1007/s00181-014-0891-x , 2014 ). The resulting nonlinear semiparametric model serves to explain the bilateral intra-industry trade indexes between Portugal and the European Union, the BRIC emerging economies, and the five Portuguese-speaking African countries. Copyright Springer-Verlag Berlin Heidelberg 2015

Suggested Citation

  • Isabel Proença & Horácio Faustino, 2015. "Modelling bilateral intra-industry trade indexes with panel data: a semiparametric approach," Computational Statistics, Springer, vol. 30(3), pages 865-884, September.
    • Handle: RePEc:spr:compst:v:30:y:2015:i:3:p:865-884
    DOI: 10.1007/s00180-015-0556-z
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