Appendix E — Literature

E.1 Purpose

This appendix is an annotated guide to the gravity literature used in NREC6006. It helps students connect the Post-Soviet replication to credible foundations, modern estimation practice, regional applications, and the final publication-style paper.

E.2 Core Gravity Foundations

Reference DOI Why students should read it Course fit
Tinbergen (1962) No DOI listed Introduces the early empirical gravity approach in international trade. Historical background
Anderson (1979) No DOI listed Provides an early theoretical foundation for gravity. Bridge from empirical regularity to theory
Anderson and Wincoop (2003) 10.1257/000282803321455214 Shows why multilateral resistance matters and why naive gravity estimates can be misleading. Chp 03 and Chp 08
Head and Mayer (2014) 10.1016/B978-0-444-54314-1.00003-3 A broad toolkit for gravity specification, data, and interpretation. Whole-course reference

Read these sources to understand why gravity is more than a convenient regression. The course begins with intuition, but the final paper must show awareness of structural gravity.

E.3 Structural Gravity

Reference DOI Why students should read it Course fit
Eaton and Kortum (2002) 10.1111/1468-0262.00352 Connects technology, geography, and trade within a structural model. Theory background
Arkolakis et al. (2012) 10.1257/aer.102.1.94 Explains welfare gains from trade across modern trade models. Policy interpretation
Yotov et al. (2016) 10.30875/abc0167e-en Practical guide to structural gravity and trade policy analysis. Methodology and replication
Fally (2015) 10.1016/j.jinteco.2015.05.005 Clarifies the relationship between structural gravity and fixed effects. Fixed effects and PPML

Structural gravity matters because it explains why exporter-year and importer-year fixed effects are not decorative controls. They represent the empirical handling of multilateral resistance.

E.4 PPML and Estimation

Reference DOI Why students should read it Course fit
Santos Silva and Tenreyro (2006) 10.1162/rest.88.4.641 Establishes why log-linear OLS can be biased under heteroskedasticity and why PPML is important. PPML
Arvis and Shepherd (2013) 10.1080/13504851.2012.718052 Discusses PPML and the adding-up issue in gravity models. PPML interpretation
Correia et al. (2020) 10.1177/1536867X20909691 Explains fast PPML estimation with high-dimensional fixed effects. Structural PPML and software limits
Herman (2023) No DOI listed Gives practical gravity-estimation guidance for applied researchers. Replication and robustness

Students should read Santos Silva and Tenreyro (2006) before treating PPML as just another robustness check. PPML changes the estimating equation, the dependent variable, and the treatment of zeros.

E.5 Fixed Effects

Reference DOI Why students should read it Course fit
Anderson and Wincoop (2003) 10.1257/000282803321455214 Shows why multilateral resistance must be controlled. Fixed-effects motivation
Fally (2015) 10.1016/j.jinteco.2015.05.005 Links fixed effects to structural gravity. Chp 08
Correia et al. (2020) 10.1177/1536867X20909691 Explains why high-dimensional fixed effects require specialized computation. PPML and Python Code
Baier and Bergstrand (2009) 10.1016/j.jinteco.2008.10.004 Develops Bonus Vetus OLS as an approximation to trade-cost effects. Chp 09

The practical lesson is that fixed effects change identification. A coefficient from pooled OLS is not automatically comparable to a coefficient from a pair fixed-effects model.

E.6 Trade Agreements

Reference DOI Why students should read it Course fit
Baier and Bergstrand (2007) 10.1016/j.jinteco.2006.02.005 Studies whether free trade agreements increase trade and highlights endogeneity concerns. Institutional variables
Baier and Bergstrand (2009) 10.1016/j.jinteco.2008.10.004 Provides a method for approximating trade-cost effects with gravity. Bonus Vetus
Head and Mayer (2021) 10.1257/jep.35.2.23 Evaluates European integration with gravity methods. EU interpretation

These readings help students interpret \(EU\_joint\), \(EAEU\_joint\), and related institutional variables as conditional associations unless the research design supports stronger causal claims.

E.7 WTO Effects

Reference DOI Why students should read it Course fit
Gulseven, Salam, et al. (2023) 10.1016/j.sciaf.2023.e01728 Applies gravity methods to WTO membership and intra-African trade. Regional extension example
Abdeljalil and Gulseven (2026) 10.1007/s11135-026-02851-6 Compares EU integration and WTO membership in the Western Balkans. Institutional interpretation
Herman (2023) No DOI listed Provides practical warnings on estimation choices and interpretation. Robustness and transparency

The Post-Soviet project treats \(wto\_joint\) as a running example of a coefficient that can be specification-sensitive. Students should explain this sensitivity rather than forcing a single story.

E.8 Regional Integration

Reference DOI Why students should read it Course fit
Head and Mayer (2021) 10.1257/jep.35.2.23 Shows how deep integration can be evaluated with gravity. EU results
Gulseven, Alhadi, et al. (2023) 10.14254/1800-5845/2023.19-4.10 Applies trade analysis to MENA. Regional paper model
Gulseven, Salam, et al. (2023) 10.1016/j.sciaf.2023.e01728 Studies intra-African trade and WTO membership. Africa adaptation
Abdeljalil and Gulseven (2026) 10.1007/s11135-026-02851-6 Studies Western Balkans integration using gravity evidence. Final-paper extension

These papers help students move from the Post-Soviet replication to another region such as Africa, GCC, MENA, COMESA, ECOWAS, EAC, ASEAN, or the Western Balkans.

E.9 Post-Soviet and Applied Gravity Papers

The course uses the Post-Soviet manuscript and dataset as the main replication case. The manuscript provides the empirical structure, while the course notebook rebuilds the workflow in Python.

Related applied readings include:

Reference DOI Why students should read it Course fit
Abdeljalil and Gulseven (2026) 10.1007/s11135-026-02851-6 Useful example of institutional comparison in a region-specific gravity paper. Final paper design
Gulseven, Salam, et al. (2023) 10.1016/j.sciaf.2023.e01728 Shows how WTO membership can be tested in a regional setting. WTO interpretation
Gulseven, Alhadi, et al. (2023) 10.14254/1800-5845/2023.19-4.10 Demonstrates applied regional trade analysis in MENA. Regional adaptation
Al Akhzami et al. (2025) 10.1111/jwip.12326 Shows how institutional and policy variables can be studied in applied economic research. Policy-variable thinking
Gulseven et al. (2025) 10.1016/j.ssaho.2025.102240 Provides an example of data-driven policy analysis outside standard gravity estimation. Policy writing

E.10 Historical Non-DOI References

Do not invent DOI numbers for classic sources. Cite them clearly as historical or working-paper references when used.

Reference DOI status Why it matters
Tinbergen, J. (1962). Shaping the World Economy: Suggestions for an International Economic Policy. The Twentieth Century Fund. No DOI listed Early empirical gravity source
Anderson, J. E. (1979). A Theoretical Foundation for the Gravity Equation. American Economic Review, 69(1), 106-116. No DOI listed Early theoretical foundation
Deardorff, A. V. (1998). Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World? No DOI listed Connects gravity to neoclassical trade theory
Herman, P. R. (2023). Gravity Estimation: Best Practices and Useful Approaches. U.S. International Trade Commission Working Paper 2023-10-C. No DOI listed in course reference list Applied estimation guidance

E.12 Minimum Reading List

Every final paper should cite and understand at least:

  • Anderson and Wincoop (2003)
  • Santos Silva and Tenreyro (2006)
  • Head and Mayer (2014)
  • Yotov et al. (2016)
  • One applied paper directly related to the region or institution studied

E.13 How to Use Literature in the Paper

  • Use theory sources to justify the gravity model.
  • Use estimation sources to justify OLS, fixed effects, PPML, and robustness checks.
  • Use applied regional sources to motivate the policy question.
  • Do not cite a paper only because it uses the word “gravity.”
  • Explain how each cited source informs the student’s empirical design.
Abdeljalil, Wiem, and Osman Gulseven. 2026. “Does EU Integration Matter More Than WTO Membership? Gravity Evidence from the Western Balkans.” Quality & Quantity, ahead of print. https://doi.org/10.1007/s11135-026-02851-6.
Al Akhzami, Salim, Lokman Zaibet, Adebayo Akintola, Osman Gulseven, and Behnaz Saboori. 2025. “Who Benefits from Strong Patent Protection? An Oil-Dependent Country’s Perspective.” Journal of World Intellectual Property 28 (1): 240–62. https://doi.org/10.1111/jwip.12326.
Anderson, James E., and Eric van Wincoop. 2003. “Gravity with Gravitas: A Solution to the Border Puzzle.” American Economic Review 93 (1): 170–92. https://doi.org/10.1257/000282803321455214.
Arkolakis, Costas, Arnaud Costinot, and Andres Rodríguez-Clare. 2012. “New Trade Models, Same Old Gains?” American Economic Review 102 (1): 94–130. https://doi.org/10.1257/aer.102.1.94.
Arvis, Jean-Francois, and Ben Shepherd. 2013. “The Poisson Quasi-Maximum Likelihood Estimator: A Solution to the ‘Adding up’ Problem in Gravity Models.” Applied Economics Letters 20 (6): 515–19. https://doi.org/10.1080/13504851.2012.718052.
Baier, Scott L., and Jeffrey H. Bergstrand. 2007. “Do Free Trade Agreements Actually Increase Members’ International Trade?” Journal of International Economics 71 (1): 72–95. https://doi.org/10.1016/j.jinteco.2006.02.005.
Baier, Scott L., and Jeffrey H. Bergstrand. 2009. “Bonus Vetus OLS: A Simple Method for Approximating International Trade-Cost Effects Using the Gravity Equation.” Journal of International Economics 77 (1): 77–85. https://doi.org/10.1016/j.jinteco.2008.10.004.
Correia, Sergio, Paulo Guimarães, and Thomas Zylkin. 2020. “Fast Poisson Estimation with High-Dimensional Fixed Effects.” Stata Journal 20 (1): 95–115. https://doi.org/10.1177/1536867X20909691.
Eaton, Jonathan, and Samuel Kortum. 2002. “Technology, Geography, and Trade.” Econometrica 70 (5): 1741–79. https://doi.org/10.1111/1468-0262.00352.
Fally, Thibault. 2015. “Structural Gravity and Fixed Effects.” Journal of International Economics 97 (1): 76–85. https://doi.org/10.1016/j.jinteco.2015.05.005.
Gulseven, Osman, Ali Al Hadi, Lokman Zaibet, Behnaz Saboori, and Ibtisam Al Abri. 2025. “Food Price Resilience in Oman: A Data-Driven Approach.” Social Sciences & Humanities Open 12: 102240. https://doi.org/10.1016/j.ssaho.2025.102240.
Gulseven, Osman, Ali A. Alhadi, and Sana A. Salam. 2023. “Determinants of Trade in the Middle East and North Africa.” Montenegrin Journal of Economics 19 (4): 115–24. https://doi.org/10.14254/1800-5845/2023.19-4.10.
Gulseven, Osman, Sana A. Salam, and Ali A. Alhadi. 2023. “Can WTO Membership Boost Intra-African Trade?” Scientific African, e01728. https://doi.org/10.1016/j.sciaf.2023.e01728.
Head, Keith, and Thierry Mayer. 2014. “Gravity Equations: Workhorse, Toolkit, and Cookbook.” In Handbook of International Economics, vol. 4. Elsevier. https://doi.org/10.1016/B978-0-444-54314-1.00003-3.
Head, Keith, and Thierry Mayer. 2021. “The United States of Europe: A Gravity Model Evaluation of the Four Freedoms.” Journal of Economic Perspectives 35 (2): 23–48. https://doi.org/10.1257/jep.35.2.23.
Herman, Peter R. 2023. Gravity Estimation: Best Practices and Useful Approaches. Working Paper 2023-10-C. U.S. International Trade Commission.
Santos Silva, J. M. C., and Silvana Tenreyro. 2006. “The Log of Gravity.” Review of Economics and Statistics 88 (4): 641–58. https://doi.org/10.1162/rest.88.4.641.
Yotov, Yoto V., Roberta Piermartini, Jose-Antonio Monteiro, and Mario Larch. 2016. An Advanced Guide to Trade Policy Analysis: The Structural Gravity Model. WTO; UNCTAD. https://doi.org/10.30875/abc0167e-en.