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National borders matter...where one draws the lines too

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  • Vicard, Vincent
  • Lavallée, Emmanuelle

Abstract

The fact that crossing a political border dramatically reduces trade flows has been widely documented in the literature. The increasing number of borders has surprisingly attracted much less attention. The number of independent countries has indeed risen from 72 in 1948 to 192 today. This paper estimates the effect of political disintegration since World War II on the measured growth in world trade. We first show that trade statistics should be considered carefully when assessing globalization over time, since the definition of trade partners varies over time. We document a sizeable resulting accounting artefact, which accounts for 17% of the growth in world trade since 1948. Second, we estimate that political disintegration alone since World War II has raised measured international trade flows by 9% but decreased actual trade flows (including inter-regional trade) by 4%.

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Bibliographic Info

Paper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/3785.

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Date of creation: 2013
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Publication status: Published in Canadian Journal of Economics, 2013, Vol. 46, no. 1. pp. 135-153.Length: 18 pages
Handle: RePEc:dau:papers:123456789/3785

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Keywords: Trade; Commerce; Frontières; Trade Statistics; Political Disintegration; Borders;

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  1. Renne, J-P., 2009. "Frequency-domain analysis of debt service in a macro-finance model for the euro area," Working papers 261, Banque de France.
  2. Guillaume HORNY & Matteo PICCHIO, 2009. "Identification of Lagged Duration Dependence in Multiple Spells Competing Risks Models," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2009001, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  3. Gilbert Cette & Jimmy Lopez, 2012. "ICT demand behaviour: an international comparison," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 21(4), pages 397-410, June.
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As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Increasing trade by creating more borders
    by Economic Logician in Economic Logic on 2010-05-07 14:09:00
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Cited by:
  1. Lavallée, Emmanuelle & Lochard, Julie, 2012. "Independence and trade: new evidence from French colonial trade data," Economics Papers from University Paris Dauphine 123456789/10246, Paris Dauphine University.
  2. Lavallée, Emmanuelle & Lochard, Julie, 2012. "Independence and trade: the specic effects of French colonialism," Economics Papers from University Paris Dauphine 123456789/9564, Paris Dauphine University.

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