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The Border Effect and the Nonlinear Relationship between Trade and Distance

Listed author(s):
  • Nuria Gallego
  • Carlos Llano

The border-effect literature confirms that sub-national units tend to trade more with the rest of their country than with foreign markets. However, it is likely that ongoing processes of trade integration will generate a trade-off between internal and external integration for sub-national units within countries. In this paper we estimate the internal and external border effect, using a novel dataset that captures intra- and international shipments between Spanish regions and regions in eight European countries with alternative treatments of the nonlinear relationship between distance and trade.

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File URL: http://hdl.handle.net/10.1111/roie.12152
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Article provided by Wiley Blackwell in its journal Review of International Economics.

Volume (Year): 22 (2014)
Issue (Month): 5 (November)
Pages: 1016-1048

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Handle: RePEc:bla:reviec:v:22:y:2014:i:5:p:1016-1048
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