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Trade in the Triad: how easy is the access to large markets?

  • Lionel Fontagné
  • Thierry Mayer
  • Soledad Zignago

In this paper, we measure market access between the United States, the EU, and Japan (the Triad), using the effect of national borders on trade patterns. We investigate overall and industry-level trends of bilateral trade openness and provide explanations for those using proxies for bilateral observed protection (tariffs and NTBs), home bias of consumers, product differentiation, and levels of FDI. The explanations related to actual protection, home bias and substitutability of goods put together explain a large part of the border effect between blocs of the Triad, although they do not explain the whole of the border effect puzzle.

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Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 38 (2005)
Issue (Month): 4 (November)
Pages: 1401-1430

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Handle: RePEc:cje:issued:v:38:y:2005:i:4:p:1401-1430
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  1. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
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  15. Hoekman, Bernard & Ng, Francis & Olarreaga, Marcelo, 2001. "Eliminating excessive tariffs on exports of least developed countries," Policy Research Working Paper Series 2604, The World Bank.
  16. Lionel Fontagné & Friedrich von Kirchbach & Mondher Mimouni, 2001. "A First Assessment of Environment-Related Trade Barriers," Working Papers 2001-10, CEPII research center.
  17. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," NBER Working Papers 10480, National Bureau of Economic Research, Inc.
  18. Chen, Natalie, 2004. "Intra-national versus international trade in the European Union: why do national borders matter?," Journal of International Economics, Elsevier, vol. 63(1), pages 93-118, May.
  19. Jonathan Eaton & Samuel Kortum, 2002. "Technology, Geography, and Trade," Econometrica, Econometric Society, vol. 70(5), pages 1741-1779, September.
  20. Keith Head & John Ries, 2001. "Increasing Returns versus National Product Differentiation as an Explanation for the Pattern of U.S.-Canada Trade," American Economic Review, American Economic Association, vol. 91(4), pages 858-876, September.
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