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articles: Spatial markets and the potential for economic integration between Canadian and U.S. regions

  • W. Mark Brown

    ()

    (Departments of Geography and Agricultural Economics, McGill University, Burnside Hall, 805 Sherbrooke Street West, Montreal, QC H3A 2K6, Canada)

  • William P. Anderson

    (Department of Geography, Boston University, 675 Commonwealth Avenue, Boston, MA 02215-1401, USA)

The potential for further economic integration among Canadian and American regions is measured by comparing province-to-state trade with state-to-state trade, where the latter is used as a benchmark of integration. To accomplish this, an attraction constrained gravity model is derived from micro foundations and estimated. The analysis demonstrates that after controlling for variations in output, distance, wages, productivity, and localization economies, the border remains a significant barrier to trade, although much less than previous estimates of the border effect using internal Canadian trade as a benchmark. The model's results also indicate that the border's influence varies across sectors, and the influence appears to be, in part, related to the presence of tariff and non-tariff barriers.

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Article provided by Springer in its journal Papers in Regional Science.

Volume (Year): 81 (2002)
Issue (Month): 1 ()
Pages: 99-120

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Handle: RePEc:spr:presci:v:81:y:2002:i:1:p:99-120
Note: Received: 1 February 1999
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