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The Incidence of Geography on Canada's Services Trade

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

We estimate geographic barriers to export trade in nine service categories for Canada's provinces from 1997 to 2007 using the structural gravity model. Constructed Home, Domestic and Foreign Bias indexes (the last two new) capture the direct plus indirect effect of services trade costs on intra-provincial, inter-provincial and international trade relative to their frictionless benchmarks. Barriers to services international trade are huge relative to inter-provincial trade and large relative to goods international trade. A novel test confirms the fit of structural gravity with services trade data.

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File URL: http://www.nber.org/papers/w17630.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17630.

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Date of creation: Dec 2011
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Publication status: published as How Much Does Geography Deflect Services Trade? Canadian Answers James E. Anderson Catherine A. Milot Yoto V. Yotov Boston College and NBER DFAIT Drexel University International Economic Review, forthcoming
Handle: RePEc:nbr:nberwo:17630
Note: ITI
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  1. James E. Anderson & Yoto V. Yotov, 2011. "Terms of Trade and Global Efficiency Effects of Free Trade Agreements, 1990-2002," NBER Working Papers 17003, National Bureau of Economic Research, Inc.
  2. Rubinstein, Yona & Helpman, Elhanan & Melitz, Marc, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," Scholarly Articles 3228230, Harvard University Department of Economics.
  3. James E Anderson, James E; Yotov, Yoto V., 2010. "Specialisation: Pro and Anti-Globalizing 1990-2002," CAGE Online Working Paper Series 15, Competitive Advantage in the Global Economy (CAGE).
  4. James E. Anderson, 2011. "The Gravity Model," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 133-160, 09.
  5. Mayer, Thierry & Zignago, Soledad, 2006. "Notes on CEPII’s distances measures," MPRA Paper 26469, University Library of Munich, Germany.
  6. James E. Anderson & Yoto V. Yotov, 2010. "The Changing Incidence of Geography," American Economic Review, American Economic Association, vol. 100(5), pages 2157-86, December.
  7. Keith Head & Thierry Mayer, 2000. "Non-Europe: The magnitude and causes of market fragmentation in the EU," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 136(2), pages 284-314, June.
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