IDEAS home Printed from https://ideas.repec.org/a/wly/iecrev/v55y2014ip791-818.html
   My bibliography  Save this article

How Much Does Geography Deflect Services Trade? Canadian Answers

Author

Listed:
  • James E. Anderson
  • Catherine A. Milot
  • Yoto V. Yotov

Abstract

We estimate geographic barriers to trade in nine service categories for Canada's provinces from 1997 to 2007 with novel high‐quality bilateral provincial trade data. The border directly reduces average provincial trade with the United States relative to interprovincial trade to 2.4% of its borderless level. Incorporating multilateral resistance reduces foreign trade relative to interprovincial to 0.1% of its frictionless potential. Geography reduces services trade some seven times more than goods trade overall. Surprisingly, intraprovincial (local) trade in services and goods is equally deflected upward, implying that the border increases interprovincial trade much more in services than goods.

Suggested Citation

  • James E. Anderson & Catherine A. Milot & Yoto V. Yotov, 2014. "How Much Does Geography Deflect Services Trade? Canadian Answers," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55, pages 791-818, August.
  • Handle: RePEc:wly:iecrev:v:55:y:2014:i::p:791-818
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/iere.12071
    Download Restriction: no

    References listed on IDEAS

    as
    1. Javier Bianchi, 2011. "Overborrowing and Systemic Externalities in the Business Cycle," American Economic Review, American Economic Association, vol. 101(7), pages 3400-3426, December.
    2. Shi, Shouyong, 2008. "Efficiency improvement from restricting the liquidity of nominal bonds," Journal of Monetary Economics, Elsevier, vol. 55(6), pages 1025-1037, September.
    3. Athanasios Geromichalos & Lucas Herrenbrueck, 2016. "Monetary Policy, Asset Prices, and Liquidity in Over‐the‐Counter Markets," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 48(1), pages 35-79, February.
    4. Dale T. Mortensen & Randall Wright, 2002. "Competitive Pricing and Efficiency in Search Equilibrium," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(1), pages 1-20, February.
    5. Wright, Randall, 2010. "A uniqueness proof for monetary steady state," Journal of Economic Theory, Elsevier, vol. 145(1), pages 382-391, January.
    6. Aleksander Berentsen & Guido Menzio & Randall Wright, 2011. "Inflation and Unemployment in the Long Run," American Economic Review, American Economic Association, pages 371-398.
    7. Bernanke, Ben & Gertler, Mark, 1989. "Agency Costs, Net Worth, and Business Fluctuations," American Economic Review, American Economic Association, vol. 79(1), pages 14-31, March.
    8. Guido Lorenzoni, 2008. "Inefficient Credit Booms," Review of Economic Studies, Oxford University Press, vol. 75(3), pages 809-833.
    9. Nosal, Ed & Rocheteau, Guillaume, 2011. "Money, Payments, and Liquidity," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262016281, January.
    10. D. Aliprantis, C. & Camera, G. & Puzzello, D., 2007. "Anonymous markets and monetary trading," Journal of Monetary Economics, Elsevier, vol. 54(7), pages 1905-1928, October.
    11. Athanasios Geromichalos & Juan M Licari & Jose Suarez-Lledo, 2007. "Monetary Policy and Asset Prices," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(4), pages 761-779, October.
    12. Mendoza, Enrique G. & Smith, Katherine A., 2006. "Quantitative implications of a debt-deflation theory of Sudden Stops and asset prices," Journal of International Economics, Elsevier, pages 82-114.
    13. Boragan Aruoba, S. & Rocheteau, Guillaume & Waller, Christopher, 2007. "Bargaining and the value of money," Journal of Monetary Economics, Elsevier, pages 2636-2655.
    14. Benjamin Lester & Andrew Postlewaite & Randall Wright, 2012. "Information, Liquidity, Asset Prices, and Monetary Policy," Review of Economic Studies, Oxford University Press, vol. 79(3), pages 1209-1238.
    15. Aleksander Berentsen & Christopher Waller, 2008. "Outside Versus Inside Bonds," IEW - Working Papers 372, Institute for Empirical Research in Economics - University of Zurich.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mario Larch & Yoto V. Yotov, 2016. "General Equilibrium Trade Policy Analysis with Structural Gravity," CESifo Working Paper Series 6020, CESifo Group Munich.
    2. MORIKAWA Masayuki, 2015. "Service Trade and Productivity: Firm-level evidence from Japan," Discussion papers 15030, Research Institute of Economy, Trade and Industry (RIETI).
    3. repec:pal:imfecr:v:65:y:2017:i:2:d:10.1057_s41308-016-0001-5 is not listed on IDEAS
    4. Andrea Ariu & Holger Breinlich & Gregory Corcos & Giordano Mion, 2017. "The interconnections between services and goods trade at the firm-level," Working Paper Research 329, National Bank of Belgium.
    5. repec:bla:worlde:v:40:y:2017:i:3:p:532-543 is not listed on IDEAS
    6. Anderson, James E. & Vesselovsky, Mykyta & Yotov, Yoto V., 2016. "Gravity with scale effects," Journal of International Economics, Elsevier, vol. 100(C), pages 174-193.
    7. Tomas Havranek & Zuzana Irsova, 2017. "Do Borders Really Slash Trade? A Meta-Analysis," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 65(2), pages 365-396, June.
    8. Panle Jia Barwick & Shengmao Cao & Shanjun Li, 2017. "Local Protectionism, Market Structure, and Social Welfare: China's Automobile Market," NBER Working Papers 23678, National Bureau of Economic Research, Inc.
    9. Crozet, Matthieu & Milet, Emmanuel & Mirza, Daniel, 2016. "The impact of domestic regulations on international trade in services: Evidence from firm-level data," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 585-607.
    10. Peter H. Egger & Joseph Francois & Douglas R. Nelson, 2017. "The Role of Goods-Trade Networks for Services-Trade Volume," The World Economy, Wiley Blackwell, vol. 40(3), pages 532-543, March.
    11. repec:bla:ecinqu:v:55:y:2017:i:2:p:778-793 is not listed on IDEAS

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:iecrev:v:55:y:2014:i::p:791-818. 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: (Wiley-Blackwell Digital Licensing) or (). General contact details of provider: http://edirc.repec.org/data/deupaus.html .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.