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On the origins of border effects: insights from the Habsburg Empire

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Schulze, Max-Stephan and Wolf, Nikolaus (2009) On the origins of border effects: insights from the Habsburg Empire. Journal of Economic Geography, Vol.9 (No.1). pp. 117-136. doi:10.1093/jeg/lbn040

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Official URL: http://dx.doi.org/10.1093/jeg/lbn040

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Abstract

What are the origins of border effects on trade and why do borders continue to matter in periods of increasing economic integration We explore the hypothesis that border effects emerged as a result of asymmetric economic integration in the unique historical setting of the multi-national Habsburg Empire prior to the First World War. While markets tended to integrate mainly due to improved infrastructure, ethno-linguistic networks had persistent trade diverting effects. We find that the political borders which separated the empires successor states after the First World War became visible in the economy from the mid-1880s onwards, already 2530 years before the First World War. This effect of a border before a border cannot be explained by factors such as administrative barriers, physical geography, changes in infrastructure or patterns of integration with neighbouring regions outside of the Habsburg customs and monetary union. However, controlling for the changing ethno-linguistic composition of the population across the regional capital cities of the empire does explain most of the estimated border effects.

Item Type: Journal Article
Subjects: H Social Sciences > HC Economic History and Conditions
G Geography. Anthropology. Recreation
Divisions: Faculty of Social Sciences > Centre for the Study of Globalisation and Regionalisation
Journal or Publication Title: Journal of Economic Geography
Publisher: Oxford University Press
ISSN: 1468-2702
Official Date: January 2009
Dates:
DateEvent
January 2009Published
Volume: Vol.9
Number: No.1
Number of Pages: 20
Page Range: pp. 117-136
DOI: 10.1093/jeg/lbn040
Status: Peer Reviewed
Publication Status: Published
Access rights to Published version: Restricted or Subscription Access
Funder: British Academy/Leverhulme Trust, Fritz Thyssen Foundation
Grant number: Az.10.05.2.050

Data sourced from Thomson Reuters' Web of Knowledge

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