We are estimating a PPML model for the UAE using a total of 32 exporting countries and about 200 importers. However, from the results that we obtain we are only interested to discuss the UAE's predicted values of exports (to estimate the Trade Potential using the conventional method) and determinants. If I understand this correctly: Despite the fact that the scope of the research is centered on the UAE, we must still include many exporters in our econometric estimations, because if we do not, by restricting the sample to the bilateral exports and imports of the UAE with the rest of the world, then we would miss out on trade diversion effects and we would not be able to take into account the multilateral resistances in the model. Is this correct? If so, is this adequate justification in order to discuss results for the UAE obtained with a sample from 32 exporting countries?
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