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

Coughlin, Cletus C. and Novy, Dennis (2013) Is the international border effect larger than the domestic border effect?: evidence from US trade. CESifo Economic Studies, 59 (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:	Article
Official URL:	http://cesifo.oxfordjournals.org/
Additional Information:	© 2012 The Authors
Divisions:	Centre for Economic Performance
Subjects:	E History America > E151 United States (General) H Social Sciences > HC Economic History and Conditions
JEL classification:	F - International Economics > F1 - Trade > F10 - General F - International Economics > F1 - Trade > F15 - Economic Integration
Date Deposited:	01 Jul 2014 14:27
Last Modified:	12 Dec 2024 00:30
Projects:	RES-000-22-3112
Funders:	Economic and Social Research Council
URI:	http://eprints.lse.ac.uk/id/eprint/57358

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