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The Border Effect in the Japanese Market: Gravity Model Analysis

Author

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  • Okubo, Toshihiro
  • 大久保, 敏弘

Abstract

This paper uses a Gravity Model to analyze the border effect in the Japanese market, which indicates how biased interregional trade is compared with international trade. The results suggest that the border effect in Japan is much lower than in the United States and Canada, and has declined year by year between 1960 and 1990. Possible reasons for the decline include the reduction of tariff rates and non-tariff barriers, the surge of foreign direct investment, and the appreciation of the yen.
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Suggested Citation

  • Okubo, Toshihiro & 大久保, 敏弘, 2000. "The Border Effect in the Japanese Market: Gravity Model Analysis," Discussion Papers 2000-08, Graduate School of Economics, Hitotsubashi University.
    • Handle: RePEc:hit:econdp:2000-08
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    File URL: https://hit-u.repo.nii.ac.jp/record/2052578/files/070econDP00-08.pdf
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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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