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National borders matterwhere one draws the lines too

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  • Emmanuelle Lavallée
  • Vincent Vicard

Abstract

The fact that crossing a political border dramatically reduces trade flows has been widely documented in the literature. The increasing number of borders has surprisingly attracted much less attention. The number of independent countries has indeed risen from 72 in 1948 to 192 today. This paper estimates the effect of political disintegration since World War II on the measured growth in world trade. We first show that trade statistics should be considered carefully when assessing globalization over time, since the definition of trade partners varies over time. We document a sizeable resulting accounting artefact, which accounts for 17% of world trade in 2007. Second, based on a structural gravity equation, we estimate that since World War II political disintegration alone has raised measured international trade flows by 7% but decreased actual trade flows (including inter-regional trade) by 2%.

Suggested Citation

  • Emmanuelle Lavallée & Vincent Vicard, 2013. "National borders matterwhere one draws the lines too," Canadian Journal of Economics, Canadian Economics Association, vol. 46(1), pages 135-153, February.
    • Handle: RePEc:cje:issued:v:46:y:2013:i:1:p:135-153
    DOI: 10.1111/caje.12008
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Increasing trade by creating more borders
      by Economic Logician in Economic Logic on 2010-05-07 19:09:00

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    Cited by:

    1. Hinnerk Gnutzmann & Arevik Gnutzmann-Mkrtchyan, 2019. "The silent success of customs unions," Canadian Journal of Economics, Canadian Economics Association, vol. 52(1), pages 178-224, February.
    2. Giovanni Federico & Antonio Tena-Junguito, 2017. "A tale of two globalizations: gains from trade and openness 1800–2010," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 153(3), pages 601-626, August.
    3. Зиядин С. & Кабашева Н., 2018. "Основы Инициативы Евразийской Интеграции Сельского Хозяйства," Вопросы государственного и муниципального управления // Public administration issues, НИУ ВШЭ, issue 5, pages 56-67.
    4. Hinnerk Gnutzmann & Arevik Gnutzmann‐Mkrtchyan, 2019. "The silent success of customs unions," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 52(1), pages 178-224, February.
    5. Döhrn, Roland & Jäger, Philipp & Zwick, Lina, 2016. "Peak Trade? Auswirkungen einer weltwirtschaftlichen Wachstumsverlangsamung auf das Exportland Nordrhein-Westfalen," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 148929.
    6. Sayabek Ziyadin & Natalya Kabasheva, 2018. "The Basis for Initiating the Eurasian Integration of the Agricultural Sector," Public administration issues, Higher School of Economics, issue 5, pages 56-67.
    7. Lavallée, Emmanuelle & Lochard, Julie, 2015. "The comparative effects of independence on trade," Journal of Comparative Economics, Elsevier, vol. 43(3), pages 613-632.

    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative

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