{"id":1744,"date":"2023-02-13T16:19:19","date_gmt":"2023-02-13T16:19:19","guid":{"rendered":"https:\/\/www.fiw.ac.at\/publications\/non-discriminatory-trade-policies-in-structural-gravity-models-evidence-from-monte-carlo-simulations\/"},"modified":"2023-02-13T16:19:19","modified_gmt":"2023-02-13T16:19:19","slug":"non-discriminatory-trade-policies-in-structural-gravity-models-evidence-from-monte-carlo-simulations","status":"publish","type":"publication","link":"https:\/\/www.fiw.ac.at\/en\/publications\/non-discriminatory-trade-policies-in-structural-gravity-models-evidence-from-monte-carlo-simulations\/","title":{"rendered":"Non-discriminatory Trade Policies in Structural Gravity Models. Evidence from Monte Carlo Simulations"},"content":{"rendered":"\nThis paper provides Monte Carlo simulation evidence on the performance of methods used for identifying the effects of non-discriminatory trade policy (NDTP) variables in structural gravity models (SGM). The benchmarked methods include the identification strategy of Heid, Larch &amp; Yotov (2015) that utilizes data on intra-national trade flows and three other methods that do not rely on this data. Results indicate that under the assumption of a data generating process that conforms with SGM theory, data on intra-national trade flows is required for identification. The bias of the three methods that do not utilize this data, is a result of the correlation between the NDTP variable and the collinear fixed effects. The MC results and an empirical application demonstrate the severity of this bias in methods that have been applied in previous empirical research.\n\n","protected":false},"featured_media":0,"menu_order":0,"template":"","jelcode":[1027,60,104],"keyword":[1030,1029,1028],"class_list":["post-1744","publication","type-publication","status-publish","hentry","jelcode-c31","jelcode-f10","jelcode-f13","keyword-monte-carlo-simulation","keyword-non-discriminatory-trade-policies","keyword-structural-gravity-model"],"acf":{"year":2017,"month":12,"day":"","volume":"","number":"178","pages":28,"reviewed":"0","citeid":"FIW_WP_178","fiwseries":"FIW Working Papers","event":null},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Non-discriminatory Trade Policies in Structural Gravity Models. Evidence from Monte Carlo Simulations - FIW<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.fiw.ac.at\/en\/publications\/non-discriminatory-trade-policies-in-structural-gravity-models-evidence-from-monte-carlo-simulations\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Non-discriminatory Trade Policies in Structural Gravity Models. Evidence from Monte Carlo Simulations - FIW\" \/>\n<meta property=\"og:description\" content=\"This paper provides Monte Carlo simulation evidence on the performance of methods used for identifying the effects of non-discriminatory trade policy (NDTP) variables in structural gravity models (SGM). The benchmarked methods include the identification strategy of Heid, Larch &amp; Yotov (2015) that utilizes data on intra-national trade flows and three other methods that do not [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.fiw.ac.at\/en\/publications\/non-discriminatory-trade-policies-in-structural-gravity-models-evidence-from-monte-carlo-simulations\/\" \/>\n<meta property=\"og:site_name\" content=\"FIW\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.fiw.ac.at\/wp-content\/uploads\/2023\/03\/wifo_fiw_logo_short_rgb.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"843\" \/>\n\t<meta property=\"og:image:height\" content=\"293\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@CentreFiw\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.fiw.ac.at\/en\/publications\/non-discriminatory-trade-policies-in-structural-gravity-models-evidence-from-monte-carlo-simulations\/\",\"url\":\"https:\/\/www.fiw.ac.at\/en\/publications\/non-discriminatory-trade-policies-in-structural-gravity-models-evidence-from-monte-carlo-simulations\/\",\"name\":\"Non-discriminatory Trade Policies in Structural Gravity Models. 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