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Intra-national Trade Costs: Measurement and Aggregation

  • Delina E. Agnosteva
  • James E. Anderson
  • Yoto V. Yotov

We develop and apply a procedure to flexibly estimate intra-national border barriers and intra-regional trade costs. Bilateral border barriers very significantly depress Canadian inter-provincial trade for some pairs, though the overall effect is rather small. Bilateral distance imposes much larger inter-provincial trade costs. Contiguity between provinces accounts for little. Intra-regional trade cost variation affects relative bilateral costs and trade flows, and alters comparative statics except in a neutral case rejected by the data. Consistent trade cost aggregation procedures are developed and applied for groups of regions and/or sectors.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19872.

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Date of creation: Jan 2014
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Handle: RePEc:nbr:nberwo:19872
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