Networks and the disappearance of the intranational home bias
Previous studies have shown that, not only countries, but also regions have a preference to trade within their administrative borders. Using unique trade flows data, we also find a large home bias in Spanish intranational trade. However, we show that this home bias tends to disappear once we take into account the higher density of social and business networks within regions than between regions. We also find that the home bias does not disappear if intranational trade flows are measured in quantity rather than value. This fact might explain why previous studies on other European countries still find an intranational home bias, even when network effects are taken into account.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Pierre-Philippe Combes & Miren Lafourcade & Thierry Mayer, 2005.
"The Trade Creating Effects of Business and Social Networks: Evidence from France,"
Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers)
- Combes, Pierre-Philippe & Lafourcade, Miren & Mayer, Thierry, 2005. "The trade-creating effects of business and social networks: evidence from France," Journal of International Economics, Elsevier, vol. 66(1), pages 1-29, May.
- Russell Hillberry & David Hummels, 2005.
"Trade Responses to Geographic Frictions: A Decomposition Using Micro-Data,"
NBER Working Papers
11339, National Bureau of Economic Research, Inc.
- 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.
- Santos Silva, J.M.C & Tenreyro, Silvana, 2005.
"The Log of Gravity,"
CEPR Discussion Papers
5311, C.E.P.R. Discussion Papers.
- Joao Santos Silva & Silvana Tenreyro, 2005. "The log of gravity," LSE Research Online Documents on Economics 3744, London School of Economics and Political Science, LSE Library.
- Joao Santos Silva & Silvana Tenreyro, 2005. "The Log of Gravity," CEP Discussion Papers dp0701, Centre for Economic Performance, LSE.
- Russell Hillberry & David Hummels, 2003.
"Intranational Home Bias: Some Explanations,"
The Review of Economics and Statistics,
MIT Press, vol. 85(4), pages 1089-1092, November.
- Gould, David M, 1994. "Immigrant Links to the Home Country: Empirical Implications for U.S. Bilateral Trade Flows," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 302-316, May.
- Carlos Llano-Verduras & Asier Minondo & Francisco Requena-Silvente, 2011.
"Is the Border Effect an Artefact of Geographic Aggregation?,"
1108, Department of Applied Economics II, Universidad de Valencia.
- Carlos Llano‐Verduras & Asier Minondo & Francisco Requena‐Silvente, 2011. "Is the Border Effect an Artefact of Geographical Aggregation?," The World Economy, Wiley Blackwell, vol. 34(10), pages 1771-1787, October.
- Carlos Llano & Asier Minondo & Francisco Requena, 2010. "Is the Border Effect an Artefact of Geographic Aggregation?," Working Paper Series 1210, Department of Economics, University of Sussex.
- James E. Rauch & Vitor Trindade, 2002.
"Ethnic Chinese Networks In International Trade,"
The Review of Economics and Statistics,
MIT Press, vol. 84(1), pages 116-130, February.
- McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-623, June.
- Holger C. Wolf, 2000. "Intranational Home Bias In Trade," The Review of Economics and Statistics, MIT Press, vol. 82(4), pages 555-563, November.
- Turrini, Alessandro & van Ypersele, Tanguy, 2010. "Traders, courts, and the border effect puzzle," Regional Science and Urban Economics, Elsevier, vol. 40(2-3), pages 81-91, May.
- Daniel L. Millimet & Thomas Osang, 2007. "Do state borders matter for U.S. intranational trade? The role of history and internal migration," Canadian Journal of Economics, Canadian Economics Association, vol. 40(1), pages 93-126, February.
- Condeço-Melhorado, Ana & Gutiérrez, Javier & García-Palomares, Juan Carlos, 2011. "Spatial impacts of road pricing: Accessibility, regional spillovers and territorial cohesion," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(3), pages 185-203, March.
When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:116:y:2012:i:2:p:178-182. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.