Instrumental‐variable estimation of exponential‐regression models with two‐way fixed effects with an application to gravity equations
含双向固定效应的指数回归工具变量估计及引力方程应用
Summary This paper introduces instrumental‐variable estimators for exponential‐regression models that feature two‐way fixed effects. These techniques allow us to develop a theory‐consistent approach to the estimation of cross‐sectional gravity equations that can accommodate the endogeneity of policy variables. We apply this approach to a dataset in which the policy decision of interest is the engagement in a free‐trade agreement. We explore ways to exploit the transitivity…