873 publications from this institution
The gravity model for international trade is one of the most successful empirical models in trade literature. There is a long tradition to log-linearise the multiplicative model and to estimate the parameters of interest by least squares. But this practice is inappropriate for several reasons. First of all, bilateral trade flows are frequently zero and disregarding countries that do not trade with each other produces biased results. Second, log-linearisation in the presence of heteroscedasticity leads to inconsistent estimates in general. In recent years, the Poisson gravity model along with pseudo maximum likelihood estimation methods have become popular as a way of dealing with such econometric issues as arise when dealing with origin-destination flows. But the standard Poisson model specification is vulnerable to problems of overdispersion and excess zero flows. To overcome these problems, this paper presents zero-inflated extensions of the Poisson and negative binomial specifications as viable alternatives to both the log-linear and the standard Poisson specifications of the gravity model. The performance of the alternative model specifications is assessed on a real world example, where more than half of country-level trade flows are zero. (authors' abstract)
The focus in this paper is on knowledge spillovers between hightechnology firms in Europe, as captured by patent citations. The European coverage is given by patent applications at the European Patent Office (EPO) that are assigned to high-technology firms located in Europe. By following the paper trail left by citations between high-technology patents we adopt a case–control matching approach to test the extent of localisation of knowledge spillovers at two geographic levels, the region and the country level. This approach views a finding of disproportionate co-location of patent citations relative to co-located control patents as evidence of localised knowledge spillovers. To disentangle border from geographic distance effects the paper adopts a Poisson spatial interaction modelling perspective. The findings of the study not only indicate that localisation of knowledge spillovers exists, but also that national border effects are more important than geographical distance effects. Thus, knowledge flows within European countries more easily than across. Not only geography matters, but also technological proximity. Interregional knowledge flows are industry specific and occur most often between regions located close to each other in technological space.
