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The Economic Significance of National Border Effects

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Author Info
Carolyn L. Evans
Abstract

To address the economic significance of national border effects, this paper provides evidence on two fundamental questions: (1) Do large border effects arise because of high perceived-price wedges between foreign and domestic products, or because imports and domestic goods are very close substitutes?; and (2) If price wedges are important, do they reflect distortionary barriers to trade or do they arise from nondistortionary factors, such as differences in transactions costs or product characteristics? I conclude that, while border effects may imply barriers, welfare costs, and a role for policy, distortions are probably not as substantial as initial border results suggested.

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Publisher Info
Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 93 (2003)
Issue (Month): 4 (September)
Pages: 1291-1312
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Handle: RePEc:aea:aecrev:v:93:y:2003:i:4:p:1291-1312

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Deardoff, A.V., 1995. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," Working Papers 382, Research Seminar in International Economics, University of Michigan.
  2. Keith Head & Thierry Mayer, 2000. "Non-Europe: The magnitude and causes of market fragmentation in the EU," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 127(2), pages 284-314, June. [Downloadable!] (restricted)
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  3. John F. Helliwell & Robert D. Putnam, 1995. "Economic Growth and Social Capital in Italy," Eastern Economic Journal, Eastern Economic Association, vol. 21(3), pages 295-307, Summer. [Downloadable!]
  4. John F. Helliwell & Geneviève Verdier, 2001. "Measuring internal trade distances: a new method applied to estimate provincial border effects in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 34(4), pages 1024-1041, November. [Downloadable!] (restricted)
  5. repec:fth:michin:382 is not listed on IDEAS
  6. Alan V. Deardorff, 1995. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," NBER Working Papers 5377, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. John F. Helliwell & Robert D. Putnam, 1995. "Economic Growth and Social Capital in Italy," Eastern Economic Journal, Palgrave Macmillan Journals, vol. 21(3), pages 295-307, Summer. [Downloadable!] (restricted)
  8. Michael Anderson & Stephen Smith, 1999. "Canadian Provinces in World Trade: Engagement and Detachment," Canadian Journal of Economics, Canadian Economics Association, vol. 32(1), pages 22-38, February. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Lionel Fontagne & Thierry Mayer & Soledad Zignago, 2004. "Trade in the Triad: How Easy is the Access to Large Markets?," Working Papers 2004-04, CEPII research center. [Downloadable!]
    Other versions:
  2. Javorcik, Beata S. & Narciso, Gaia, 2007. "Differentiated products and evasion of import tariffs," Policy Research Working Paper Series 4123, The World Bank. [Downloadable!]
    Other versions:
  3. Enrique Martinez-Garcia, 2008. "Globalization and monetary policy: an introduction," Globalization and Monetary Policy Institute Working Paper 11, Federal Reserve Bank of Dallas. [Downloadable!]
  4. Brülhart, Marius & Trionfetti, Federico, 2005. "A Test of Trade Theories when Expenditure is Home Biased," CEPR Discussion Papers 5097, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  5. Mario J. Crucini & Chris I. Telmer & Marios Zachariadis, 2005. "Understanding European Real Exchange Rates," American Economic Review, American Economic Association, vol. 95(3), pages 724-738, June. [Downloadable!] (restricted)
    Other versions:
  6. Philipp Maier, 2005. "A `Global Village' without borders? International price differentials at eBay," DNB Working Papers 044, Netherlands Central Bank, Research Department. [Downloadable!]
  7. Maria Bas & Ivan Ledezma, 2007. "Market access and the evolution of within plant productivity in Chile," PSE Working Papers 2007-09, PSE (Ecole normale supérieure). [Downloadable!]
    Other versions:
  8. Rebecca Hellerstein & Sofia Berto Villas-Boas, 2006. "Arm's-length transactions as a source of incomplete cross-border transmission: the case of autos," Staff Reports 251, Federal Reserve Bank of New York. [Downloadable!]
    Other versions:
  9. Rebecca Hellerstein, 2006. "A decomposition of the sources of incomplete cross-border transmission," Staff Reports 250, Federal Reserve Bank of New York. [Downloadable!]
    Other versions:
  10. Hans-Christian Heinemeyer & Max-Stephan Schulze & Nikolaus Wolf, 2008. "Endogenous Borders? The Effects of New Borders on Trade in Central Europe 1885-1933," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
  11. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2006. "Trading Partners and Trading Volumes," DEGIT Conference Papers c011_022, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
  12. Alessandro Olper & Valentina Raimondi, 2007. "Market access asymmetry in food trade," LICOS Discussion Papers 18707, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  13. Salvador Gil-Pareja & Rafael Llorca-Vivero & José A. Martínez-Serrano & Josep Oliver-Alonso, . "The Border Effect in Spain," Working Papers 2004-28, FEDEA. [Downloadable!]
    Other versions:
    • Salvador Gil-Pareja & Rafael Llorca-Vivero & José A. Martínez-Serrano & Josep Oliver-Alonso, 2005. "The Border Effect in Spain," The World Economy, Blackwell Publishing, vol. 28(11), pages 1617-1631, November. [Downloadable!] (restricted)
  14. Kei-Mu Yi, 2005. "Vertical specialization and the border effect puzzle," Working Papers 05-24, Federal Reserve Bank of Philadelphia. [Downloadable!]
  15. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2007. "Estimating Trade Flows: Trading Partners and Trading Volumes," NBER Working Papers 12927, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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