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Border Effects Without Borders: What Divides Japan'S Internal Trade?

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  • Jens Wrona

Abstract

This article identifies a “border” effect in the absence of a border. The finding that trade between east and west Japan is 23.1% to 51.3% lower than trade within both country parts is established despite the absence of an obvious east–west division due to historical borders, cultural differences, or past civil wars. Postwar agglomeration processes, reflected by the contemporaneous structure of Japan's business and social networks, instead of cultural differences, induced by long‐lasting historical shocks, are identified as an explanation for the east–west bias in intra‐Japanese trade.

Suggested Citation

  • Jens Wrona, 2018. "Border Effects Without Borders: What Divides Japan'S Internal Trade?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(3), pages 1209-1262, August.
    • Handle: RePEc:wly:iecrev:v:59:y:2018:i:3:p:1209-1262
    DOI: 10.1111/iere.12302
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    Citations

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    Cited by:

    1. Cletus C. Coughlin & Dennis Novy, 2021. "Estimating Border Effects: The Impact Of Spatial Aggregation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 62(4), pages 1453-1487, November.
    2. Jhorland Ayala-Garcia & Sandy Dall'Erba & William C. Ridley, 2021. "Externalities of extreme natural disasters on local tax capacity," Documentos de trabajo sobre Economía Regional y Urbana 299, Banco de la Republica de Colombia.
    3. Gabriel Loumeau, 2020. "Regional Borders, Commuting and Transport Network Integration," KOF Working papers 20-489, KOF Swiss Economic Institute, ETH Zurich.
    4. Carlos Llano-Verduras & Santiago Pérez-Balsalobre & Ana Rincón-Aznar, 2021. "Market fragmentation and the rise of sub-national regulation," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 67(3), pages 765-797, December.
    5. Björn Thor Arnarson & Joakim Gullstrand, 2022. "Linking local services to global manufactures," Scandinavian Journal of Economics, Wiley Blackwell, vol. 124(1), pages 3-34, January.
    6. Jerónimo Carballo & Alejandro Graziano & Georg Schaur & Christian Volpe Martincus, 2021. "The Effects of Transit Systems on International Trade," CESifo Working Paper Series 9353, CESifo.
    7. Jorge Díaz-Lanchas & José Luis Zofío & Carlos Llano, 2022. "A trade hierarchy of cities based on transport cost thresholds," Regional Studies, Taylor & Francis Journals, vol. 56(8), pages 1359-1376, August.
    8. Marta Santamaría & Jaume Ventura & Ugur Yesilbayraktar, 2023. "Exploring European Regional Trade," Working Papers 1384, Barcelona School of Economics.
    9. Zheng, Han, 2022. "Heterogeneous Internal Trade Cost and Its Implications in Trade," Discussion paper series HIAS-E-117, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    10. Kazunobu Hayakawa & Ikumo Isono & Satoru Kumagai, 2020. "Transportation Costs in Archipelagos: Evidence from Indonesia," The Developing Economies, Institute of Developing Economies, vol. 58(3), pages 227-241, September.
    11. Santamaría, Marta & Ventura, Jaume & Yeşilbayraktar, Uğur, 2022. "Exploring European Regional Trade," CAGE Online Working Paper Series 650, Competitive Advantage in the Global Economy (CAGE).

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