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National Border Effects: Location, Not Nationality, Matters

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  • Carolyn L. Evans

Abstract

A recent literature documents the downward impact of national borders on trade. This paper probes the relative importance of two potential sources of border effects: (1) pure locational factors, such as transport costs and tariffs; and (2) an inherent disadvantage for a firm selling in a foreign market. I am able to make this decomposition by using data on the local sales of foreign affiliates of US multinational enterprises, on US bilateral exports, and on domestic sales by host‐country firms. The “border effect” arises almost entirely from locational factors. If a firm establishes and sells from a subsidiary located in the foreign country, its local sales are about on a par with those of domestic firms in that market.

Suggested Citation

  • Carolyn L. Evans, 2007. "National Border Effects: Location, Not Nationality, Matters," Review of International Economics, Wiley Blackwell, vol. 15(2), pages 347-369, May.
    • Handle: RePEc:bla:reviec:v:15:y:2007:i:2:p:347-369
    DOI: 10.1111/j.1467-9396.2007.00665.x
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    References listed on IDEAS

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    Cited by:

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    4. Patrick M. Krueger & Tajudaullah Bhaloo & Pauline Vaillancourt Rosenau, 2009. "Health Lifestyles in the United States and Canada: Are We Really So Different?," Social Science Quarterly, Southwestern Social Science Association, vol. 90(5), pages 1380-1402, December.

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