Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/236642 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 9100
Publisher: 
Center for Economic Studies and Ifo Institute (CESifo), Munich
Abstract: 
This paper analyses the effect of international borders and of trade agreements at international borders on subnational (i.e. regional) growth. We construct an extensive panel dataset covering 1,350 regions in 86 countries worldwide between 1950 and 2017. Our results show that international borders decrease regional income per capita, while trade agreements at international borders increase regional income per capita by about the same magnitude. The positive marginal effect of trade agreements on regional income corresponds to at least three fifths of the negative marginal effect of international borders. Thus, trade agreements can compensate negative border effects and explain regional inequalities within countries. An array of robustness tests supports our interpretations.
Subjects: 
border effects
trade
trade agreements
GDP per capita
regional analysis
JEL: 
F14
F15
F43
O18
R12
Document Type: 
Working Paper
Appears in Collections:

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.