In this setting, the model is not run for one specific year, but over a 5-year average for the period 2003-07.44 This strategy maximises the country coverage and mitigates the problem of measurement errors. This traditional specification of the model has however been revised to account for the fact that (i) trade between two countries is affected not only by absolute bilateral trade costs but relatively to the trade costs among all country-pairs, and (ii) the sizes of other economies matter too - this is often referred to as “multilateral resistance”. The easiest way of controlling for “multilateral resistance” and obtaining unbiased coefficient estimates is to use country or country-pair specific fixed effects (Eaton and Kortum, 2002, Feenstra, 2004). The key drawback of this estimation method is that it precludes the inclusion in the model of explanatory variables that vary only in the country or country-pair dimensions, such as our key explanatory variables.