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Intra-national trade costs: Assaying regional frictions

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  • Agnosteva, Delina E.
  • Anderson, James E.
  • Yotov, Yoto V.

Abstract

The effects of intra-regional, inter-regional and international frictions on the trade flows of Canada’s provinces are disentangled by gravity model techniques. Unexplained Trade Barriers (UTBs) are the difference between inter-provincial trade barriers inferred from pair fixed effects and from bilateral distance and contiguity. The estimates reveal large intra-national trade costs and UTBs that vary significantly across Canada’s provinces. Decomposition of UTBs into relative border effects and a systematic residual UTB is based on a novel Cobb–Douglas aggregator of intra-provincial and pure inter-provincial trade costs. Variation of both components across provinces is big.

Suggested Citation

  • Agnosteva, Delina E. & Anderson, James E. & Yotov, Yoto V., 2019. "Intra-national trade costs: Assaying regional frictions," European Economic Review, Elsevier, vol. 112(C), pages 32-50.
    • Handle: RePEc:eee:eecrev:v:112:y:2019:i:c:p:32-50
    DOI: 10.1016/j.euroecorev.2018.11.008
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    More about this item

    Keywords

    Intra-regional and inter-regional Frictions; Border frictions; Unexplained trade barriers; Canada;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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