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Sectoral border effects and the geographic concentration of production

  • Gianluca Cafiso

    ()

The object of this paper is to study the relationship between the border effect and the geographic concentration of production. We explain this relationship through the home market effect and test the robustness of this explanation by using an analysis that considers the European single market. A sectoral gravity equation is estimated with different econometric estimators; in particular, we discuss a recently suggested estimator for log-linear CES models. Overall, our findings suggest a steady relationship between the border effect and the concentration of production. Furthermore, the analysis of concentration through a synthetic index provides us with valuable insights into the structure of the European industry.

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File URL: http://hdl.handle.net/10.1007/s10290-011-0091-0
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Article provided by Springer & Institut für Weltwirtschaft (Kiel Institute for the World Economy) in its journal Review of World Economics.

Volume (Year): 147 (2011)
Issue (Month): 3 (September)
Pages: 543-566

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Handle: RePEc:spr:weltar:v:147:y:2011:i:3:p:543-566
DOI: 10.1007/s10290-011-0091-0
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