Burger, Martijn; Oort, Frank van; Linders, Gert-Jan - In: Spatial Economic Analysis 4 (2009) 2, pp. 167-190
Abstract Conventional studies of bilateral trade patterns specify a log-normal gravity equation for empirical estimation. However, the log-normal gravity equation suffers from three problems: the bias created by the logarithmic transformation, the failure of the homoskedasticity assumption, and...