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Does trade creation by social and business networks hold in services? An analysis for Accommodation and Restaurants in Spain

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  • de la Mata, Tamara

    ()
    (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.)

Abstract

Recent literature on the border effect fostered research on informal barriers to trade and the role of networks promoting it. In relation to social networks, it has been shown that the intensity of trade of goods is positively correlated with the migration flows between any pair of countries/regions. In this article it is investigated if such a relation also holds for the Spanish domestic trade flows of services. With this aim, a gravity model rooted in the Dixit–Stiglitz–Krugman theoretical frameworks is used taking advantage of a unique dataset on interregional trade flows of some of the main sectors linked to Tourism, namely, Accommodation and Restaurants. A different analysis of each sector separately is carried out, finding a big positive effect for Restaurants, but no effect for the Hostel industry. These novel results can be explained by forces driving the demand in each sector. Migration linkages are measured by means of Register data, regarding the stock of people born in each region living in the others. Business networks are approached by a matrix of companies in different regions operating in these key sectors that are connected.

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Bibliographic Info

Paper provided by Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History) in its series Working Papers in Economic Theory with number 2011/04.

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Length: 36 pages
Date of creation: Oct 2011
Date of revision:
Handle: RePEc:uam:wpaper:201104

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Keywords: Gravity model; bilateral exports; border effect; Social and business networks; internal migration; interregional trade.;

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  1. Belderbos, Rene & Sleuwaegen, Leo, 1998. "Tariff jumping DFI and export substitution: Japanese electronics firms in Europe," International Journal of Industrial Organization, Elsevier, vol. 16(5), pages 601-638, September.
  2. Tamara de la Mata & Carlos Llano, 2010. "Modelo gravitatorio y turismo: Una aplicación a los flujos monetarios interregionales del sector Turismo en España," Revista de Estudios Regionales, Universidades Públicas de Andalucía, vol. 3, pages 211-240.
  3. Roger White & Bedassa Tadesse, 2008. "Cultural Distance and the US Immigrant-Trade Link," The World Economy, Wiley Blackwell, vol. 31(8), pages 1078-1096, 08.
  4. Fukunari Kimura & Hyun-Hoon Lee, 2006. "The Gravity Equation in International Trade in Services," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 142(1), pages 92-121, April.
  5. Dunlevy, James A. & Hutchinson, William K., 2001. "The Pro-Trade Effect of Immigration on American Exports During the Late Nineteenth and Early Twentieth Centuries," IZA Discussion Papers 375, Institute for the Study of Labor (IZA).
  6. Combes, Pierre-Philippe & Lafourcade, Miren & Mayer, Thierry, 2005. "The trade-creating effects of business and social networks: evidence from France," Journal of International Economics, Elsevier, vol. 66(1), pages 1-29, May.
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