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Within U.S. trade and the long shadow of the american secession

  • Felbermayr, Gabriel
  • Gröschl, Jasmin

Using data from U.S. commodity flow survey, we show that the historical Union-Confederacy border lowers contemporaneous trade between U.S. states by about 13%. The finding is robust over econometric models, survey waves, or aggregation levels. Including contemporaneous controls, such as network or institutional variables, lowers the estimate only slightly. Historical variables, such as slavery, do not explain the effect. Adding U.S. states unaffected by the Civil War, we argue that the friction is not merely reflecting unmeasured North-South differences. Finally, the border effect is larger for differentiated than for homogeneous goods, stressing the potential role for cultural factors and trust

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Paper provided by University of Munich, Department of Economics in its series Munich Reprints in Economics with number 20587.

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Date of creation: 2014
Date of revision:
Publication status: Published in Economic Inquiry 1 52(2014): pp. 382-404
Handle: RePEc:lmu:muenar:20587
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  1. Daniel L. Millimet & Thomas Osang, 2007. "Do state borders matter for U.S. intranational trade? The role of history and internal migration," Canadian Journal of Economics, Canadian Economics Association, vol. 40(1), pages 93-126, February.
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  16. Combes, Pierre-Philippe & Lafourcade, Miren & Mayer, Thierry, 2005. "The trade-creating effects of business and social networks: evidence from France," Journal of International Economics, Elsevier, vol. 66(1), pages 1-29, May.
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  21. repec:bla:restud:v:76:y:2009:i:1:p:143-179 is not listed on IDEAS
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