Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/214981
Authors: 
Reinecke, Antonia
Schmerer, Hans-Jörg
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper 7979
Abstract: 
This paper develops an approach that allows constructing regional proxies of government effectiveness at a highly dis-aggregated level. Our idea builds on the well documented interdependence between institutions and exports, which allows estimating the latent government effectiveness using methods of structural equation modeling. Unobserved institutional quality for each individual region is predicted using the regression outcomes. The impact of this novel identification strategy is tested using various panel applications. Results show that the magnitude of the effect of institutional quality can be biased in estimates that neglect regional differences in the effectiveness of institutions.
Subjects: 
trade
institutions
Chinese plant data
latent variable
structural equation modelling
JEL: 
D02
F10
P16
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.