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Border effects and border regions: Lessons from the German unification

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  • Nitsch, Volker

Abstract

This paper examines data on trade flows between West German Bundesländer (federal states) and East Germany to explore the effect of national borders on trade. Although the data cover only a small fraction of intra-German trade flows, I find a home bias of about factor 2.2; West German shipments to East Germany are about 120% larger than deliveries to an otherwise similar foreign country. Based on this result, possible implications for border regions are discussed --

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Bibliographic Info

Paper provided by Hamburg Institute of International Economics (HWWA) in its series HWWA Discussion Papers with number 203.

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Date of creation: 2002
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Handle: RePEc:zbw:hwwadp:26291

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Web page: http://www.econstor.eu/handle/10419/20
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Related research

Keywords: home bias; intranational trade; gravity regression; unification;

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References

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  1. James E. Anderson & Eric van Wincoop, 2001. "Gravity with Gravitas: A Solution to the Border Puzzle," NBER Working Papers 8079, National Bureau of Economic Research, Inc.
  2. Jarko Fidrmuc & Jan Fidrmuc, 2001. "Disintegration and Trade," LICOS Discussion Papers, LICOS - Centre for Institutions and Economic Performance, KU Leuven 9901, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  3. John F. Helliwell, 1996. "Do National Borders Matter for Quebec's Trade?," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 29(3), pages 507-22, August.
  4. James E. Anderson & Eric van Wincoop, 2001. "Borders, Trade and Welfare," Boston College Working Papers in Economics, Boston College Department of Economics 508, Boston College Department of Economics.
  5. Carolyn L. Evans, 2001. "Border effects and the availability of domestic products abroad," Staff Reports, Federal Reserve Bank of New York 127, Federal Reserve Bank of New York.
  6. 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, Canadian Economics Association, vol. 34(4), pages 1024-1041, November.
  7. Volker Nitsch, 2000. "National borders and international trade: evidence from the European Union," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 33(4), pages 1091-1105, November.
  8. Michael Anderson & Stephen Smith, 1999. "Canadian Provinces in World Trade: Engagement and Detachment," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 32(1), pages 22-38, February.
  9. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, American Economic Association, vol. 85(3), pages 615-23, June.
  10. 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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Citations

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Cited by:
  1. Mayer, Thierry & Pierre-Phillippe Combes & Miren Lafourcade, 2003. "Can Business and Social Networks Explain the Border Effect Puzzle?," Royal Economic Society Annual Conference 2003, Royal Economic Society 150, Royal Economic Society.
  2. Matthias Helble, 2006. "Border Effect Estimates for France and Germany Combining International Trade and Intra-national Transport Flows," IHEID Working Papers, Economics Section, The Graduate Institute of International Studies 13-2006, Economics Section, The Graduate Institute of International Studies, revised Jun 2006.
  3. Olivier Lamotte, 2003. "Disintegration and trade in South-eastern Europe," Cahiers de la Maison des Sciences Economiques, Université Panthéon-Sorbonne (Paris 1) j04031, Université Panthéon-Sorbonne (Paris 1).
  4. Francisco Requena & Carlos Llano, 2010. "The border effects in Spain: an industry-level analysis," Empirica, Springer, Springer, vol. 37(4), pages 455-476, November.
  5. Marie Daumal & Soledad Zignago, 2008. "Border Effects of Brazilian States," Working Papers 2008-11, CEPII research center.
  6. Dimitris Kallioras & George Petrakos & Georgios Fotopoulos, 2005. "Economic integration, regional structural change and cohesion in the EU new member-states," ERSA conference papers ersa05p383, European Regional Science Association.

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