Citation

Discussion Paper Details

Please find the details for DP8056 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Estimating Cross-Industry Cross-Country Models Using Benchmark Industry Characteristics

Author(s): Antonio Ciccone and Elias Papaioannou

Publication Date: October 2010

Keyword(s): Amplification Bias and Industry-Country Models

Programme Area(s): International Macroeconomics

Abstract: International industry data permits testing whether the industry-specific impact of cross-country differences in institutions or policies is consistent with economic theory. Empirical implementation requires specifying the industry characteristics that determine impact strength. Most of the literature has been using US proxies of the relevant industry characteristics. We show that using industry characteristics in a benchmark country as a proxy of the relevant industry characteristics can result in an attenuation bias or an amplification bias. We also describe circumstances allowing for an alternative approach that yields consistent estimates. As an application, we reexamine the influential conjecture that financial development facilitates the reallocation of capital from declining to expanding industries.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=8056

Bibliographic Reference

Ciccone, A and Papaioannou, E. 2010. 'Estimating Cross-Industry Cross-Country Models Using Benchmark Industry Characteristics'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=8056