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Is There A Continental Bias In Trade?

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  • Salvador Gil-Pareja

    ()

  • Rafael Llorca
  • José A. Martínez-Serrano

Abstract

The relationship between geography and trade is a central topic in international economics. This paper investigates the potential existence of a continental bias in world trade flows on a sample of 182 countries over the period 1990-2006. Using traditional estimation techniques and recent developments in the econometric analysis of the gravity equation, we find robust evidence of an economically significant continental bias in trade. It implies that, other things equal, countries located on the same continent trade more with each other than countries located on different continents. A continent-by-continent analysis reveals that Oceania, America, Europe and Asia are behind this result. Africa is the only region for which the results are not conclusive.

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File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa10/ERSA2010finalpaper792.pdf
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Bibliographic Info

Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa10p792.

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Date of creation: Sep 2011
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Handle: RePEc:wiw:wiwrsa:ersa10p792

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  12. Baier, Scott L. & Bergstrand, Jeffrey H., 2004. "Economic determinants of free trade agreements," Journal of International Economics, Elsevier, vol. 64(1), pages 29-63, October.
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  18. Jeffrey A. Frankel & Ernesto Stein & Shang-Jin Wei, 1993. "Continental Trading Blocs: Are They Natural, or Super-Natural?," NBER Working Papers 4588, National Bureau of Economic Research, Inc.
  19. Shang-Jin Wei, 1996. "Intra-National versus International Trade: How Stubborn are Nations in Global Integration?," NBER Working Papers 5531, National Bureau of Economic Research, Inc.
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  26. Gil-Pareja, Salvador & Llorca-Vivero, Rafael & Martínez-Serrano, José Antonio, 2008. "Trade effects of monetary agreements: Evidence for OECD countries," European Economic Review, Elsevier, vol. 52(4), pages 733-755, May.
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