As countries with close political, cultural and historical relationships are likely to trade more with each other than normal and
these country-pairfactors may have a significant impact on the level of bilateral trade between these two countries, but not with third
countries, researchers have attempted to incorporate as many relevant dummy variables as possible in the model to represent these
bilateral ties so as to obtain an unbiased estimation. However, as so many unobservable dyadic factors remain, the choice of specific
country-pair fixed variables is always an intractable problem in empirical studies.