Coughlin, C. C. and Novy, Dennis. (2013) Is the international border effect larger than the domestic border effect? Evidence from US trade. CESifo Economic Studies, Volume 59 (Number 2). pp. 249-276. ISSN 1610-241X

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Abstract

Many studies have found that international borders represent large barriers to trade. But how do international borders compare to domestic border barriers? We investigate international and domestic border barriers in a unified framework. We consider a data set of exports from individual US states to foreign countries and combine it with trade flows between and within US states. After controlling for distance and country size, we estimate that relative to state-to-state trade, crossing an individual US state’s domestic border appears to entail a larger trade barrier than crossing the international US border. Due to the absence of governmental impediments to trade within the United States, this result is surprising. We interpret it as highlighting the concentration of economic activity and trade flows at the local level.

Item Type:	Journal Article
Subjects:	H Social Sciences > HF Commerce
Divisions:	Faculty of Social Sciences > Economics
Journal or Publication Title:	CESifo Economic Studies
Publisher:	Oxford University Press
ISSN:	1610-241X
Date:	2013
Volume:	Volume 59
Number:	Number 2
Page Range:	pp. 249-276
Identification Number:	10.1093/cesifo/ifs002
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access
Funder:	Economic and Social Research Council
Grant number:	RES-000-22-3112
URI:	http://wrap.warwick.ac.uk/id/eprint/44808

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