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Estimating border effects : the impact of spatial aggregation

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Coughlin, Cletus C. and Novy, Dennis (2021) Estimating border effects : the impact of spatial aggregation. International Economic Review, 62 (4). pp. 1453-1487. doi:10.1111/iere.12520 ISSN 0020-6598.

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Official URL: https://doi.org/10.1111/iere.12520

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Abstract

Trade data are typically aggregated across space. In this paper, we investigate the sensitivity of gravity estimation to spatial aggregation. We build a model in which micro regions are aggregated into macro regions. We then apply the model to the large literature on border effects in domestic and international trade. Our theory shows that aggregation leads to border effect heterogeneity. Larger regions and countries are systematically associated with smaller border effects. We test our theory with aggregate and industry-level trade flows for U.S. states. Our results confirm the model's predictions, with strong heterogeneity patterns.

Item Type: Journal Article
Subjects: H Social Sciences > HA Statistics
H Social Sciences > HF Commerce
J Political Science > JC Political theory
Divisions: Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH): International trade, Boundaries -- Economic aspects, Spatial analysis (Statistics)
Journal or Publication Title: International Economic Review
Publisher: Wiley-Blackwell Publishing, Inc.
ISSN: 0020-6598
Official Date: November 2021
Dates:
DateEvent
November 2021Published
24 May 2021Available
29 March 2021Accepted
Volume: 62
Number: 4
Page Range: pp. 1453-1487
DOI: 10.1111/iere.12520
Status: Peer Reviewed
Publication Status: Published
Reuse Statement (publisher, data, author rights): This is the peer reviewed version of the following article: C. COUGHLINAND, C. and NOVY, D. (2021), ESTIMATING BORDER EFFECTS:THE IMPACT OF SPATIAL AGGREGATION. International Economic Review. Accepted Author Manuscript, which has been published in final form at https://doi.org/10.1111/iere.12520. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.
Access rights to Published version: Open Access (Creative Commons)
Date of first compliant deposit: 1 April 2021
Date of first compliant Open Access: 24 May 2022
RIOXX Funder/Project Grant:
Project/Grant IDRIOXX Funder NameFunder ID
ES/P00766X/1[ESRC] Economic and Social Research Councilhttp://dx.doi.org/10.13039/501100000269
CAGE, ESRC grant ES/L011719/1[ESRC] Economic and Social Research Councilhttp://dx.doi.org/10.13039/501100000269
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