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Do National Borders Matter for Quebec's Trade?

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  • John F. Helliwell

Abstract

Using a gravity model of 1988-90 merchandise trade flows among Canadian provinces and between Canadian provinces and U.S. states, this paper, building on earlier work by McCallum, shows that Quebec trades twenty times more with other provinces than it does with U.S. states of similar size and distance. Comparison with survey evidence shows that these internal trade linkages are far stronger than previously was thought. The possible implications for Quebec separation, and for international economics, are considerable. If more broadly confirmed, the results imply that the fabric of national economies is far tighter than that of the global trading system, even for countries operating without substantial trade barriers.

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Bibliographic Info

Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 29 (1996)
Issue (Month): 3 (August)
Pages: 507-22

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Handle: RePEc:cje:issued:v:29:y:1996:i:3:p:507-22

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Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4
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  1. Tamim Bayoumi & Michael W. Klein, 1995. "A Provincial View of Capital Mobility," NBER Working Papers 5115, National Bureau of Economic Research, Inc.
  2. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-23, June.
  3. Helpman, Elhanan, 1984. "Increasing returns, imperfect markets, and trade theory," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 7, pages 325-365 Elsevier.
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