Theodorakopoulos, A., "Unlocking New Methods to Estimate Country-specific Effects and Trade Elasticities with the Structural Gravity Model" | WEBINAR

Title: "Unlocking New Methods to Estimate Country-specific Effects and Trade Elasticities with the Structural Gravity Model" (with Rebecca Freeman, Mario Larch and Yoto V. Yotov)

Speaker: Associate Professor Angelos Theodorakopoulos, Aston Business School

Host: Assistant Professor Alexopoulos Angelos, Department of Economics, Athens University of Economics and Business

Time: 15.30 -17.00

WEBINAR

Attachments:  PDF of Relevant Paper

Abstact: We propose new methods to identify the full impact of country-specific characteristics, policies, and trade costs on bilateral trade flows within the framework of ‘the new quantitative trade model.’ We complement theory with a simple two-stage estimating procedure, and offer proof of concept by quantifying the impact of country-specific R&D expenditure on trade. Results suggest a positive relationship overall, but a larger impact on international (versus domestic) trade. Further, our methodology allows to recover trade elasticity estimates without the need for price/tariff data. Bringing this to the sectoral level, we obtain estimates of the trade elasticity for manufacturing, services, and tradable versus non-tradable sectors.