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The Border Effect in the Japanese Market: A Gravity Model Analysis

Author

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  • Toshihiro Okubo

    (University of Michigan, Institut Universitaire de Hautes Études Internationales, Geneve 21, Suisse)

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.

Suggested Citation

  • Toshihiro Okubo, 2003. "The Border Effect in the Japanese Market: A Gravity Model Analysis," Working Papers 494, Research Seminar in International Economics, University of Michigan.
  • Handle: RePEc:mie:wpaper:494
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    File URL: http://fordschool.umich.edu/rsie/workingpapers/Papers476-500/r494.pdf
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    References listed on IDEAS

    as
    1. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    2. John F. Helliwell, 1996. "Do National Borders Matter for Quebec's Trade?," Canadian Journal of Economics, Canadian Economics Association, vol. 29(3), pages 507-522, August.
    3. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-623, June.
    4. Wall, Howard-J, 2002. "Has Japan Been Left Out in the Cold by Regional Integration?," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 20(2), pages 117-134, April.
    5. Carolyn L. Evans, 2003. "The Economic Significance of National Border Effects," American Economic Review, American Economic Association, vol. 93(4), pages 1291-1312, September.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Wrona, Jens, 2015. "Border Effects without Borders," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113060, Verein für Socialpolitik / German Economic Association.
    2. Toshihiro Okubo, 2004. "Intra-industry Trade and Production Networks," IHEID Working Papers 13-2004, Economics Section, The Graduate Institute of International Studies.
    3. Michael Artis & Toshihiro Okubo, 2011. "The intranational business cycle in Japan," Oxford Economic Papers, Oxford University Press, vol. 63(1), pages 111-133, January.
    4. Fukao, Kyoji & Okubo, Toshihiro, 2011. "Why Has the Border Effect in the Japanese Machinery Sectors Declined?: The Role of Business Networks in East Asian Machinery Trade," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 26, pages 651-671.
    5. repec:dau:papers:123456789/5844 is not listed on IDEAS
    6. Toshihiro Okubo, 2006. "Trade Bloc Formation in Interwar Japan --Gravity Model Analysis-- (forthcoming in Journal of the Japanese and International Economies)," IHEID Working Papers 03-2006, Economics Section, The Graduate Institute of International Studies.
    7. Cabrer Borrás, Bernanrdi & Rico Belda, Paz & Sancho Pérez, Amparo, 2016. "Los gastos públicos de promoción de los destinos y la demanda turística interior en España/Public Promotional Spending and Domestic Tourism Demand in Spain," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 34, pages 573-596, Agosto.
    8. Jean-Marc Siroën & Aycil Yucer, 2012. "The impact of MERCOSUR on trade of Brazilian states," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(3), pages 553-582, September.
    9. repec:bla:revurb:v:29:y:2017:i:2:p:114-134 is not listed on IDEAS
    10. Gallego López, Nuria & Llano Verduras, Carlos & Perez García, Julian, 2010. "Estimación de los flujos de transporte de mercancías interregionales trimestrales mediante técnicas de interpolación temporal/Estimating Quarterly Interregional Commodity Transport Flows by Means of T," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 28, pages 699(38á.)-6, Diciembre.
    11. Salvador Gil-Pareja & Rafael Llorca-Vivero & José A. Martínez-Serrano & Josep Oliver-Alonso, "undated". "The Border Effect in Spain," Working Papers 2004-28, FEDEA.
    12. Nuria Gallego & Carlos Llano, 2014. "The Border Effect and the Nonlinear Relationship between Trade and Distance," Review of International Economics, Wiley Blackwell, vol. 22(5), pages 1016-1048, November.
    13. Tamara Mata & Carlos Llano, 2013. "Social networks and trade of services: modelling interregional flows with spatial and network autocorrelation effects," Journal of Geographical Systems, Springer, vol. 15(3), pages 319-367, July.
    14. Ülengin, Füsun & Çekyay, Bora & Toktaş Palut, Peral & Ülengin, Burç & Kabak, Özgür & Özaydın, Özay & Önsel Ekici, Şule, 2015. "Effects of quotas on Turkish foreign trade: A gravity model," Transport Policy, Elsevier, vol. 38(C), pages 1-7.
    15. Yener Kandogan, 2006. "Falling Walls and Lifting Curtains: Analysis of Border Effects in Transition Countries," William Davidson Institute Working Papers Series 821, William Davidson Institute at the University of Michigan.
    16. Anwar, Sajid & Nguyen, Lan Phi, 2011. "Foreign direct investment and trade: The case of Vietnam," Research in International Business and Finance, Elsevier, vol. 25(1), pages 39-52, January.
    17. Kyoji Fukao; Toshihiro Okubo, 2004. "Why Has the Border Effect in the Japanese Market Declined?," IHEID Working Papers 12-2004, Economics Section, The Graduate Institute of International Studies.
    18. Tarasov, Alexander & Felbermayr, Gabriel, 2014. "Trade and the Spatial Distribution of Transport Infrastructure," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100511, Verein für Socialpolitik / German Economic Association.
    19. James LeSage & Carlos Llano-Verduras, 2014. "Forecasting spatially dependent origin and destination commodity flows," Empirical Economics, Springer, vol. 47(4), pages 1543-1562, December.
    20. Miriam Manchin & Anna Maria Pinna, 2009. "Border effects in the enlarged EU area: evidence from imports to accession countries," Applied Economics, Taylor & Francis Journals, vol. 41(14), pages 1835-1854.
    21. Asier Minondo, 2010. "Do industries' average firm size, productivity and skill-intensity explain the border effect?," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 65(4), pages 353-364, December.
    22. Hayakawa, Kazunobu, 2017. "Domestic and international border effects: The cases of China and Japan," China Economic Review, Elsevier, vol. 43(C), pages 118-126.
    23. Wrona, Jens, 2015. "Border effects without borders: What divides Japan's internal trade?," DICE Discussion Papers 185, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

    More about this item

    Keywords

    Gravity Model; Border effect; Interregional trade; International t;

    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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