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Comparing four estimation strategies for the gravity equation: OLS, PPML, panel fixed effects, and instrumental variables. All models use cluster-robust standard errors at the country-pair level.
Source: BACI International Trade Database (CEPII), HS92, 1995-2024 | CEPII Gravity Database
Methodology: Gravity equation estimated using OLS (log-linear), PPML (Santos Silva & Tenreyro, 2006), panel fixed effects (country-pair + year FE), and IV (colonial ties as instrument). All standard errors clustered at the country-pair level.