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Is the international border effect larger than the domestic border effect? Evidence from US trade

Coughlin, Cletus C. and Novy, Dennis (2012) Is the international border effect larger than the domestic border effect? Evidence from US trade. CEP Discussion Papers (CEPDP1162). Centre for Economic Performance, London School of Economics and Political Science, London, UK.

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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 U.S. states to foreign countries and combine it with trade flows between and within U.S. states. After controlling for distance and country size, we estimate that relative to state-to-state trade, crossing an individual U.S. state’s domestic border appears to entail a larger trade barrier than crossing the international U.S. 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: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk/_new/publications/series.asp?...
Additional Information: © 2012 The Authors
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HF Commerce
JEL classification: F - International Economics > F1 - Trade > F10 - General
F - International Economics > F1 - Trade > F15 - Economic Integration
Sets: Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 07 Aug 2013 13:49
Last Modified: 09 Apr 2019 23:06
URI: http://eprints.lse.ac.uk/id/eprint/51507

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