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Within U.S. Trade And The Long Shadow Of The American Secession

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  • GABRIEL FELBERMAYR
  • JASMIN GRÖSCHL

Abstract

Using data from the US commodity flow surveys, we show that the historical Union- Confederacy border lowers contemporaneous trade between US states by about 16 percent relative to trade flows within the former alliances. Amongst one million placebos, there is no other constellation of state grouping that would yield a larger border effect. The finding is robust over different econometric models, treatment of the rest of the world, available survey waves, or levels of aggregation. Including contemporaneous controls, such as network, institutional or demographic variables, and Heckscher-Ohlin or Linder terms, lowers the estimate only slightly. Historical variables, such as the incidence of slavery, do not explain the effect away. Adding US states unaffected by the Civil War, we argue that the friction is not merely reflecting unmeasured North-South differences. Finally, the estimated border effect is larger for differentiated than for homogeneous goods, stressing the potential role for cultural factors and trust.
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Suggested Citation

  • Gabriel Felbermayr & Jasmin Gröschl, 2014. "Within U.S. Trade And The Long Shadow Of The American Secession," Economic Inquiry, Western Economic Association International, vol. 52(1), pages 382-404, January.
  • Handle: RePEc:bla:ecinqu:v:52:y:2014:i:1:p:382-404
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    File URL: http://hdl.handle.net/10.1111/j.1465-7295.2012.00510.x
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    Cited by:

    1. Heid, Benedikt & Langer, Julian & Larch, Mario, 2012. "Income and democracy: Evidence from system GMM estimates," Economics Letters, Elsevier, vol. 116(2), pages 166-169.
    2. Che, Yi & Du, Julan & Lu, Yi & Tao, Zhigang, 2015. "Once an enemy, forever an enemy? The long-run impact of the Japanese invasion of China from 1937 to 1945 on trade and investment," Journal of International Economics, Elsevier, vol. 96(1), pages 182-198.
    3. Hinz, Julian, 2017. "The view from space: Theory-based time-varying distances in the gravity model," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168270, Verein für Socialpolitik / German Economic Association.

    More about this item

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • N72 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: 1913-
    • N92 - Economic History - - Regional and Urban History - - - U.S.; Canada: 1913-
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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