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Border Effects Without Borders: What Divides Japan's Internal Trade?

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  • Jens Wrona

Abstract

This paper identifies a “border” effect in the absence of a border. The finding that trade between East- and West-Japan is 23.1 to 51.3 percent lower than trade within both country parts, is established despite the absence of an obvious east-west division due to historical borders, cultural differences or past civil wars. Post-war agglomeration processes, reflected by the contemporaneous structure of Japan’s business and social networks, rather than cultural differences, induced by long-lasting historical shocks, are identified as an explanation for the east-west bias in intra-Japanese trade.

Suggested Citation

  • Jens Wrona, 2018. "Border Effects Without Borders: What Divides Japan's Internal Trade?," CESifo Working Paper Series 7056, CESifo.
  • Handle: RePEc:ces:ceswps:_7056
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp7056.pdf
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    3. Kazunobu Hayakawa & Ikumo Isono & Satoru Kumagai, 2020. "Transportation Costs in Archipelagos: Evidence from Indonesia," The Developing Economies, Institute of Developing Economies, vol. 58(3), pages 227-241, September.

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    More about this item

    Keywords

    border effects; gravity equation; intra-national Trade; Japan;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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