Is the international border effect larger than the domestic border effect? Evidence from US trade
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 1610-241XFull text not available from this repository.
Official URL: http://dx.doi.org/10.1093/cesifo/ifs002
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|
|Page Range:||pp. 249-276|
|Access rights to Published version:||Restricted or Subscription Access|
|Funder:||Economic and Social Research Council|
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