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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/30415
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| Title: | | Is the international border effect larger than the domestic border effect? : evidence from U.S. trade  |
| Authors: | | Coughlin, Cletus C. Novy, Dennis |
| Issue Date: | | 2009 |
| Series/Report no.: | | CESifo working paper 2853 |
| 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 unique data set of exports from individual U.S. states to foreign countries and combine it with trade flows within and between U.S. states. After controlling for distance and country size, we find that relative to state-to-state trade, crossing an individual U.S. state's domestic border entails a larger trade barrier than crossing the international U.S. border. This finding highlights the concentration of trade flows at the local level and the importance of factors such as informational barriers and transportation costs even for the relatively short distances associated with state-to-state trade. |
| Subjects: | | international border effects intranational home bias domestic borders gravity trade costs |
| JEL: | | F10 F15 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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