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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. John F. Helliwell, 1995. "Do National Borders Matter for Quebec's Trade?," NBER Working Papers 5215, National Bureau of Economic Research, Inc.
  2. James E. Anderson & Eric van Wincoop, 2000. "Gravity with Gravitas: A Solution to the Border Puzzle," Boston College Working Papers in Economics, Boston College Department of Economics 485, Boston College Department of Economics.
  3. Volker Nitsch, 2000. "National borders and international trade: evidence from the European Union," Canadian Journal of Economics, Canadian Economics Association, vol. 33(4), pages 1091-1105, November.
  4. James E. Anderson & Eric van Wincoop, 2001. "Borders, Trade and Welfare," NBER Working Papers 8515, National Bureau of Economic Research, Inc.
  5. Jarko Fidrmuc & Jan Fidrmuc, 2000. "Disintegration and Trade," William Davidson Institute Working Papers Series 353, William Davidson Institute at the University of Michigan.
  6. Michael Anderson & Stephen Smith, 1999. "Canadian Provinces in World Trade: Engagement and Detachment," Canadian Journal of Economics, Canadian Economics Association, vol. 32(1), pages 22-38, February.
  7. 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.
  8. 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.
  9. 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.
  10. 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.
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Citations

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Cited by:
  1. 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.
  2. Matthias Helble, 2007. "Border Effect Estimates for France and Germany Combining International Trade and Intranational Transport Flows," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 143(3), pages 433-463, October.
  3. Daumal, Marie & Zignago, Soledad, 2008. "Border Effects of Brazilian States," Economics Papers from University Paris Dauphine 123456789/7448, Paris Dauphine University.
  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. 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).
  6. 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.

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