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Border Effects Before and After 9/11: Panel Data Evidence Across Industries

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  • Zhiqi Chen
  • Horatiu A. Rus
  • Anindya Sen

Abstract

We build a unique industry-level panel data set to estimate border effects with respect to U.S.-Canada trade for each year from 1992 to 2005. Estimates from data aggregated at the province/state level yield border effects in the early 1990s that increase slightly and then decline after the implementation of the North American Free Trade Agreement (NAFTA), but significantly increase after 2001. Results based on three digit NAICS level data reveal higher border effects in the early 1990s and considerable heterogeneity across industries. These results imply that the tragic events of 9/11 had considerable adverse impacts for U.S.-Canada trade.
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Suggested Citation

  • Zhiqi Chen & Horatiu A. Rus & Anindya Sen, 2016. "Border Effects Before and After 9/11: Panel Data Evidence Across Industries," The World Economy, Wiley Blackwell, vol. 39(10), pages 1456-1481, October.
    • Handle: RePEc:bla:worlde:v:39:y:2016:i:10:p:1456-1481
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    File URL: http://hdl.handle.net/10.1111/twec.12413
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    Cited by:

    1. Mr. Itai Agur, 2016. "Products and Provinces: A Disaggregated Panel Analysis of Canada’s Manufacturing Exports," IMF Working Papers 2016/193, International Monetary Fund.
    2. Maoh, Hanna F. & Khan, Shakil A. & Anderson, William P., 2016. "Truck movement across the Canada–US border: The effects of 9/11 and other factors," Journal of Transport Geography, Elsevier, vol. 53(C), pages 12-21.
    3. Balaguer, Jacint & Ripollés, Jordi, 2018. "Disentangling the importance of international border effects. Some evidence from Portugal–Spain based on diesel retailers," Economic Modelling, Elsevier, vol. 72(C), pages 260-269.
    4. Farrukh Suvankulov, 2015. "Revisiting National Border Effects in Foreign Trade in Goods of Canadian Provinces," Staff Working Papers 15-28, Bank of Canada.
    5. Smith, Matthew J. & Ray, Sayan Basu & Raymond, Aaron & Sienna, Micah & Lilly, Meredith B., 2018. "Long-term lessons on the effects of post-9/11 border thickening on cross-border trade between Canada and the United States: A systematic review," Transport Policy, Elsevier, vol. 72(C), pages 198-207.

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