Paper #1235

Título:

Estimating cross-industry cross-country models using benchmark industry characteristics

Autores:

Antonio Ciccone y Elias Papaioannou

Data:

Septiembre 2010

Resumen:

Empirical cross-industry cross-country models are applied widely in economics, for example to investigate the determinants of economic growth or international trade. Estimation generally relies on US proxies for unobservable technological industry characteristics, for example industries' dependence on external finance or relationship-specific inputs. We examine the properties of the estimator and find that estimates can be biased towards zero (attenuated) or away from zero (amplified), depending on how technological similarity with the US covaries with other country characteristics. We also develop an alternative estimator that yields a lower bound on the true effect in cross-industry cross-country models of comparative advantage.

Palabras clave:

International specialization and trade, industry growth, measurement error, financial development, institutions, regulation, factor endowments

Códigos JEL:

G30, F10, O40

Área de investigación:

Macroeconomía y Economía Internacional

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