IDEAS home Printed from https://ideas.repec.org/p/oec/ecoaaa/1073-en.html
   My bibliography  Save this paper

Road Connectivity and the Border Effect: Evidence from Europe

Author

Listed:
  • Henrik Braconier

    (OECD)

  • Mauro Pisu

    (OECD)

Abstract

Several studies have reported a large negative effect of national borders on the volume of trade. We provide new estimates of the border effect for continental Europe using road rather than great circle – or “as-crows-fly” – distance. Road distances for 48 180 European city pairs have been extracted from Bing Maps Routing Services. As our dataset also has information on travel time, we are able to consider costs related to time in addition to those depending on distance. We find that for the same great circle distance and the same city size, the road distance between two cities located in the same country is around 10% shorter than that between cities located in different ones. Travel speed is also higher between cities in the same country. We find that by using measures based on the actual road distance rather than the great circle distance, the negative effect of international borders on goods trade in a standard gravity equation is lowered by around 15%. Time-related trade costs account for an additional 10% reduction in the border effect. Overall these results point to the importance of road networks – and road transport policy in general – to enhance market integration. La connectivité routière et l'effet frontière : données concernant l'Europe Plusieurs études font état d’un effet négatif très prononcé des frontières nationales sur le volume des échanges. Nous livrons de nouvelles estimations de l’effet frontière en Europe continentale en utilisant les distances routières au lieu des distances orthodromiques – c’est-à-dire « à vol d’oiseau ». Les distances routières de 48 180 paires de villes européennes sont issues du service de calcul d’itinéraires de Bing Cartes. Étant donné que notre ensemble de données comporte aussi des informations sur les temps de trajet, nous sommes en mesure de prendre en compte les coûts liés au temps, en plus de ceux qui dépendent de la distance. Nous constatons qu’à distance orthodromique et taille d’agglomération égales, la distance routière entre deux villes d’un même pays est inférieure de 10 % environ à celle qui sépare des villes situées dans des pays différents. De même, la distance est parcourue plus rapidement lorsque les villes se trouvent dans le même pays. Nous observons qu’en utilisant des mesures établies sur la distance routière effective, plutôt que sur la distance orthodromique, l’effet négatif des frontières internationales sur les échanges de marchandises dans une équation de gravité standard diminue d’environ 15 %. Les coûts des échanges liés à la durée des trajets sont à l’origine d’une réduction supplémentaire de 10 % de l’effet frontière. Dans l’ensemble, ces résultats font ressortir l’importance des réseaux routiers – et de la politique du transport routier en général – pour renforcer l’intégration des marchés.

Suggested Citation

  • Henrik Braconier & Mauro Pisu, 2013. "Road Connectivity and the Border Effect: Evidence from Europe," OECD Economics Department Working Papers 1073, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:1073-en
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1787/5k43nxmh51mw-en
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. David L. Hummels & Georg Schaur, 2013. "Time as a Trade Barrier," American Economic Review, American Economic Association, vol. 103(7), pages 2935-2959, December.
    2. John F. Helliwell & Geneviève Verdier, 2001. "Measuring internal trade distances: a new method applied to estimate provincial border effects in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 34(4), pages 1024-1041, November.
    3. Simeon Djankov & Caroline Freund & Cong S. Pham, 2010. "Trading on Time," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 166-173, February.
    4. Bougheas, Spiros & Demetriades, Panicos O. & Morgenroth, Edgar L. W., 1999. "Infrastructure, transport costs and trade," Journal of International Economics, Elsevier, vol. 47(1), pages 169-189, February.
    5. Carolyn Evans, 2006. "Border effects and the availability of domestic products abroad," Canadian Journal of Economics, Canadian Economics Association, vol. 39(1), pages 211-246, February.
    6. Russell H. Hillberry, 2002. "Aggregation bias, compositional change, and the border effect," Canadian Journal of Economics, Canadian Economics Association, vol. 35(3), pages 517-530, August.
    7. Chen, Natalie, 2004. "Intra-national versus international trade in the European Union: why do national borders matter?," Journal of International Economics, Elsevier, vol. 63(1), pages 93-118, May.
    8. Carolyn L. Evans & James Harrigan, 2005. "Distance, Time, and Specialization: Lean Retailing in General Equilibrium," American Economic Review, American Economic Association, vol. 95(1), pages 292-313, March.
    9. Alain de Serres & Peter Hoeller & Christine de la Maisonneuve, 2001. "The Width of the Intra-European Economic Borders," OECD Economics Department Working Papers 304, OECD Publishing.
    10. 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

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Travel time and the border effect
      by Economic Logician in Economic Logic on 2013-09-09 19:00:00

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. Gabriel Felbermayr & Jasmin Katrin Gröschl & Thomas Steinwachs, 2016. "Handelseffekte von Grenzkontrollen," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 69(05), pages 18-27, March.

    More about this item

    Keywords

    distance; distance; gravity; gravité; international trade; road transport; temps de trajet; transport routier; travel time; échanges internationaux;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • R49 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Other

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oec:ecoaaa:1073-en. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/edoecfr.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.