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Border effects and the availability of domestic products abroad

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  • Carolyn Evans

Abstract

Trade between countries could fall short of trade within a country because (1) the volume of international trade is less than the volume of domestic trade for a given product (the intensive margin); or (2) some goods that are sold domestically are simply not exported (the extensive margin). My theoretical model illustrates that either of these two factors could explain a given aggregate `border effect.' I examine the empirical relevance of this distinction by isolating the fraction of total domestic production attributable only to exporters, finding that around one-half of the border effect may be attributed to each explanation.

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  • Carolyn Evans, 2006. "Border effects and the availability of domestic products abroad," Canadian Journal of Economics, Canadian Economics Association, vol. 39(1), pages 211-246, February.
  • Handle: RePEc:cje:issued:v:39:y:2006:i:1:p:211-246
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    Cited by:

    1. Cletus C. Coughlin & Dennis Novy, 2013. "Is the International Border Effect Larger than the Domestic Border Effect? Evidence from US Trade," CESifo Economic Studies, CESifo, vol. 59(2), pages 249-276, June.
    2. Chunlai Chen & Jun Yang & Christopher Findlay, 2008. "Measuring the Effect of Food Safety Standards on China’s Agricultural Exports," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(1), pages 83-106, April.
    3. M. Manchin & AM. Pinna, 2003. "Border effects in the enlarged EU area," Working Paper CRENoS 200301, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    4. Zhiqi Chen & Horatiu A. Rus & Anindya Sen, 2016. "Border Effects Before and After 9/11: Panel Data Evidence Across Industries," The World Economy, Wiley Blackwell, vol. 39(10), pages 1456-1481, October.
    5. 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.
    6. Henrik Braconier & Mauro Pisu, 2013. "Road Connectivity and the Border Effect: Evidence from Europe," OECD Economics Department Working Papers 1073, OECD Publishing.
    7. Hillberry, Russell & Hummels, David, 2008. "Trade responses to geographic frictions: A decomposition using micro-data," European Economic Review, Elsevier, vol. 52(3), pages 527-550, April.
    8. Tamara Mata & Carlos Llano, 2013. "Social networks and trade of services: modelling interregional flows with spatial and network autocorrelation effects," Journal of Geographical Systems, Springer, vol. 15(3), pages 319-367, July.
    9. Miriam Manchin & Anna Maria Pinna, 2009. "Border effects in the enlarged EU area: evidence from imports to accession countries," Applied Economics, Taylor & Francis Journals, vol. 41(14), pages 1835-1854.
    10. Kei-Mu Yi, 2010. "Can Multistage Production Explain the Home Bias in Trade?," American Economic Review, American Economic Association, vol. 100(1), pages 364-393, March.
    11. Nitsch, Volker, 2002. "Border effects and border regions: Lessons from the German unification," HWWA Discussion Papers 203, Hamburg Institute of International Economics (HWWA).
    12. Heinemeyer, Hans Christian & Schulze, Max Stephan & Wolf, Nikolaus, 2008. "Endogenous Borders? Exploring a Natural Experiment on Border Effects," CEPR Discussion Papers 6909, C.E.P.R. Discussion Papers.
    13. Hans-Christian Heinemeyer & Max-Stephan Schulze & Nikolaus Wolf, 2008. "Endogenous Borders? The Effects of New Borders on Trade in Central Europe 1885-1933," CESifo Working Paper Series 2246, CESifo Group Munich.
    14. Liu, Xiaoyun & Whalley, John & Xin, Xian, 2010. "Non-tradable goods and the border effect puzzle," Economic Modelling, Elsevier, vol. 27(5), pages 909-914, September.
    15. Shan (Victor) Jiang, "undated". "Immigration, Information, and Trade Margins," Working Papers 2007-16, Department of Economics, University of Calgary, revised 31 Oct 2007.
    16. Yener Kandogan, 2006. "Falling Walls and Lifting Curtains: Analysis of Border Effects in Transition Countries," William Davidson Institute Working Papers Series 821, William Davidson Institute at the University of Michigan.
    17. Ghazalian, Pascal L. & Furtan, W. Hartley, 2008. "The effects of multinational activities on the measurement of home bias," Journal of the Japanese and International Economies, Elsevier, vol. 22(3), pages 401-416, September.
    18. Cafiso, Gianluca, 2007. "The Geographic Space in International Trade: from Gravity to New Economic Geography," MPRA Paper 20269, University Library of Munich, Germany.
    19. Kei-Mu Yi, 2005. "Vertical specialization and the border effect puzzle," Working Papers 05-24, Federal Reserve Bank of Philadelphia.

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    JEL classification:

    • F1 - International Economics - - Trade

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