英语翻译
As we argue in the introduction (and verify below),Pi and Si are negatively correlated:the larger a country is,the farther its typical resident is from other countries.Thus if we do not control for size in (4),Pi will be negatively correlated with the residual,and thus will not be a valid instrument.Intuitively,smaller countries may engage in more trade with other countries simply because they engage in less within-country trade.This portion of the geographic variation in international trade cannot be used to identify trade's impact on income.Similarly,if we fail to control for Ti in (4),Si will be negatively correlated with the residual.Thus,our approach requires us to examine the impacts of both international trade and country size.