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Do National Borders Really Matter? Canada-US Regional Trade Reconsidered

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Author Info
Anderson, Michael A
Smith, Stephen L S

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Abstract

This paper reconsiders the Canada-US border's effect on trade. The authors first test whether the findings of McCallum (1995) and Helliwell (1996)--that the border substantially decreases trade--change when better data are used. It is found that the "border effect" may be substantially less than previously measured--up to 50% smaller--but remains surprisingly large. An explanation of the border's effect is sought. Transportation equipment offers a natural experiment, as North American trade has been completely liberalized for several decades. A higher border effect is found for these freely traded goods, which rules out standard protection as the border effect's cause. Copyright 1999 by Blackwell Publishing Ltd.

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Publisher Info
Article provided by Blackwell Publishing in its journal Review of International Economics.

Volume (Year): 7 (1999)
Issue (Month): 2 (May)
Pages: 219-27
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Handle: RePEc:bla:reviec:v:7:y:1999:i:2:p:219-27

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  1. Matthias Helble, 2006. "Border Effect Estimates for France and Germany Combining International Trade and Intra-national Transport Flows," HEI Working Papers 13-2006, Economics Section, The Graduate Institute of International Studies, revised Jun 2006. [Downloadable!]
  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. 136(2), pages 284-314, June. [Downloadable!] (restricted)
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  3. Richard Baldwin & Frauke Skudelny & Daria Taglioni, 2005. "Trade effects of the euro - evidence from sectoral data," Working Paper Series 446, European Central Bank. [Downloadable!]
  4. Fidrmuc, J. & Fidrmuc, J., 2000. "Integration, disintegration and trade in Europe : evolution of trade relations during the 1990s," Discussion Paper 12, Tilburg University, Center for Economic Research. [Downloadable!]
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  5. John Whalley & Xian Xin, 2006. "Home and Regional Biases and Border Effects in Armington Type Models," NBER Working Papers 12439, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Kei-Mu Yi, 2005. "Vertical specialization and the border effect puzzle," Working Papers 05-24, Federal Reserve Bank of Philadelphia. [Downloadable!]
  7. Chunlai Chen & Jun Yang & Christopher Findlay, 2008. "Measuring the Effect of Food Safety Standards on China’s Agricultural Exports," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 144(1), pages 83-106, April. [Downloadable!] (restricted)
  8. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September. [Downloadable!] (restricted)
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  9. Matthias Helble, 2007. "Border Effect Estimates for France and Germany Combining International Trade and Intranational Transport Flows," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 143(3), pages 433-463, October. [Downloadable!] (restricted)
  10. Jose Pavía & Bernardi Cabrer & Luis Vila, 2006. "Interregional Trade Linkages and the Commercial Role: The Spanish Case," International Advances in Economic Research, Springer, vol. 12(1), pages 91-103, February. [Downloadable!] (restricted)
  11. Salvador Gil-Pareja & Rafael Llorca-Vivero & José Martínez-Serrano, 2006. "The border effect in Spain: The Basque Country case," Regional Studies, Taylor and Francis Journals, vol. 40(4), pages 335-345, June. [Downloadable!] (restricted)
  12. Carlo Cottarelli & Julio Escolano, 2004. "Assessing the Assessment: A Critical Look at the June 2003 Assessment of the United Kingdom's Five Tests for Euro Entry," IMF Working Papers 04/116, International Monetary Fund. [Downloadable!]
  13. Kei-Mu Yi, 2008. "Can multi-stage production explain the home bias in trade?," Working Papers 08-12, Federal Reserve Bank of Philadelphia. [Downloadable!]
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