Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/322408 
Authors: 
Year of Publication: 
2025
Series/Report no.: 
UCD Centre for Economic Research Working Paper Series No. WP25/02
Publisher: 
University College Dublin, UCD School of Economics, Dublin
Abstract: 
I conduct a comprehensive analysis of China's international and domestic border effects. My results confirm the negative impact of administrative borders on exports. In my analysis, I account for multilateral resistance terms, which were omitted in previous relevant studies. My findings show that this omission underestimates both international and inter-provincial border effects while overstating the gap between them. I find a negative relationship between international and inter-provincial border effects, driven by provinces reducing inter-provincial trade as they increase international or intra-provincial trade. This substitution effect can, however, be mitigated through the coordinated growth of both international and intra-provincial exports. In the last step, I develop a linguistic distance metric to compare language gaps between Chinese provinces and between provinces and foreign partners, showing that linguistic differences mediate the negative impact of provincial borders on inter-provincial trade flows.
Subjects: 
Border effects
National border
Provincial border
Multilateral resistances
Substitution effect
JEL: 
F14
F15
F40
Document Type: 
Working Paper

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