The focus is on cross-sectional dependence in panel trade flow models. We propose alternative specifications for modeling time-invariant factors such as sociocultural indicator variables, e.g., common language and currency. These are typically treated as a source of heterogeneity that is eliminated using fixed effects transformations, but we find evidence of cross-sectional dependence after eliminating country-specific and time-specific effects. These findings suggest use of alternative simultaneous dependence model specifications that accommodate cross-sectional dependence, which we set forth along with Bayesian estimation methods. Ignoring cross-sectional dependence implies biased estimates from panel trade flow models that rely on fixed effects.

中文翻译：

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静态贸易专家组数据设置中的横截面依存模型规范

重点是面板贸易流模型中的截面依赖性。我们提出了用于建模时不变因素（例如社会文化指标变量，例如，通用语言和货币）的替代规范。这些通常被视为异质性​​的来源，可以通过固定效应转换来消除异质性，但是我们发现，在消除了针对特定国家和特定时间的效应之后，存在横截面依赖性的证据。这些发现建议使用替代的同时依赖性模型规范，以适应横截面依赖性，这是我们与贝叶斯估计方法一起提出的。忽略截面依赖性意味着来自面板贸易流量模型的依赖固定影响的估计偏差。