Road Connectivity and the Border Effect: Evidence from Europe
AbstractSeveral studies have reported a large negative effect of national borders on the volume of trade. We provide new estimates of the border effect for continental Europe using road rather than great circle – or “as-crows-fly” – distance. Road distances for 48 180 European city pairs have been extracted from Bing Maps Routing Services. As our dataset also has information on travel time, we are able to consider costs related to time in addition to those depending on distance. We find that for the same great circle distance and the same city size, the road distance between two cities located in the same country is around 10% shorter than that between cities located in different ones. Travel speed is also higher between cities in the same country. We find that by using measures based on the actual road distance rather than the great circle distance, the negative effect of international borders on goods trade in a standard gravity equation is lowered by around 15%. Time-related trade costs account for an additional 10% reduction in the border effect. Overall these results point to the importance of road networks – and road transport policy in general – to enhance market integration.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Nottingham, GEP in its series Discussion Papers with number 2013-06.
Date of creation: 2013
Date of revision:
Contact details of provider:
Postal: School of Economics University of Nottingham University Park Nottingham NG7 2RD
Phone: (44) 0115 951 5620
Fax: (0115) 951 4159
Web page: http://www.nottingham.ac.uk/gep/index.aspx
More information through EDIRC
Other versions of this item:
- Henrik Braconier & Mauro Pisu, 2013. "Road Connectivity and the Border Effect: Evidence from Europe," OECD Economics Department Working Papers 1073, OECD Publishing.
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F15 - International Economics - - Trade - - - Economic Integration
- R49 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-25 (All new papers)
- NEP-EUR-2013-10-25 (Microeconomic European Issues)
- NEP-GEO-2013-10-25 (Economic Geography)
- NEP-TRE-2013-10-25 (Transport Economics)
- NEP-URE-2013-10-25 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Carolyn L. Evans, 2003. "The Economic Significance of National Border Effects," American Economic Review, American Economic Association, vol. 93(4), pages 1291-1312, September.
- Chen, Natalie, 2004.
"Intra-national versus international trade in the European Union: why do national borders matter?,"
Journal of International Economics,
Elsevier, vol. 63(1), pages 93-118, May.
- Chen, Natalie, 2002. "Intra-national versus International Trade in the European Union: Why do National Borders Matter?," CEPR Discussion Papers 3407, C.E.P.R. Discussion Papers.
- Alain de Serres & Peter Hoeller & Christine de la Maisonneuve, 2001. "The Width of the Intra-European Economic Borders," OECD Economics Department Working Papers 304, OECD Publishing.
- Carolyn L. Evans, 2001.
"Border effects and the availability of domestic products abroad,"
127, Federal Reserve Bank of New York.
- Carolyn Evans, 2006. "Border effects and the availability of domestic products abroad," Canadian Journal of Economics, Canadian Economics Association, vol. 39(1), pages 211-246, February.
- Russell H. Hillberry, 2002. "Aggregation bias, compositional change, and the border effect," Canadian Journal of Economics, Canadian Economics Association, vol. 35(3), pages 517-530, August.
- David Hummels & Georg Schaur, 2012.
"Time as a Trade Barrier,"
NBER Working Papers
17758, National Bureau of Economic Research, Inc.
- Carolyn L. Evans & James Harrigan, 2005. "Distance, Time, and Specialization: Lean Retailing in General Equilibrium," American Economic Review, American Economic Association, vol. 95(1), pages 292-313, March.
- Simeon Djankov & Caroline Freund & Cong S. Pham, 2010.
"Trading on Time,"
The Review of Economics and Statistics,
MIT Press, vol. 92(1), pages 166-173, February.
- Spiros Bougheas & Panicos Demetriades & Edgar Morgenroth, 1996.
"Infrastructure, Transport Costs and Trade,"
Keele Department of Economics Discussion Papers (1995-2001)
96/7, Department of Economics, Keele University.
- John F. Helliwell & Geneviève Verdier, 2001. "Measuring internal trade distances: a new method applied to estimate provincial border effects in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 34(4), pages 1024-1041, November.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hilary Hughes).
If references are entirely missing, you can add them using this form.