This paper proposes a generalized panel data model with random effects and first-order spatially autocorrelated residuals that encompasses two previously suggested specifications. The first one is described in Anselin's (1988) book and the second one by Kapoor et al. (2007). Our encompassing...

This paper formulates an econometric model of firm growth that explicitly accounts for interdependence of firm growth rates within multinational corporate networks. We apply a recently introduced IV-estimation procedure for peer group effects to directly test for growth spillovers within...

Social capital is widely regarded to constitute an important indicator for the economic performance of a society. This paper analyzes the impact of various socio-demographic characteristics on social capital. Proxy variables for social capital are obtained from a comprehensive principal...

This paper analyses the effects of distance as a common determinant of exports and FDI in a three-factor New Trade Theory model, assuming that distance affects both pure trade costs and plant set-up costs. Exports and FDI are not necessarily substitutes with respect to distance, since the...

Many applied researchers have to deal with spatially autocorrelated residuals (SAR). Available tests that identify spatial spillovers as captured by a significant SAR parameter, are either based on maximum likelihood (MLE) or generalized method of moments (GMM) estimates. This paper illustrates...

This article contributes to the literature on the Law of One Price (LOP) and absolute Purchasing Power Parity (PPP) in two ways. First, it uses a novel set of PPP data from the International Comparison Programme for OECD countries and 195 internationally comparable products from 1980 to 1996....

This paper examines the consequences of model misspecification using a panel data model with spatially autocorrelated disturbances. The performance of several maximum likelihood estimators assuming different specifications for this model are compared using Monte Carlo experiments. These include...