We extend the protection for sale framework by modelling non tariff barriers. Explicitly introducing partial rent capturing leads to a testable specification that bridges the gap between the theoretical Grossman and Helpman (1994) model and its empirical implementation, where coverage ratios...

Noting that many economic variables display occasional shifts in their second order moments, we investigate the performance of homogenous panel unit root tests in the presence of permanent volatility shifts. It is shown that in this case, panel unit root tests derived under time invariant...

We introduce a new, factor based bootstrap approach which is robust under heteroskedastic error terms for inference in functional coefficient models. Modeling the functional coefficient parametrically, the bootstrap approximation of an F statistic is shown to hold asymptotically. In simulation...

A panel data set covering 145 countries between 1960 and 2010 has been investigated closely by using models of parameter heterogeneity. The Functional Coefficient Model (FCM) introduced by Cai, Fan and Yao (2000) allows estimated parameters of growth determinants to vary as functions of one or...