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South-North Trade in Ireland: Gravity and Firms from the Good Friday Agreement to Brexit

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  • Peter Neary
  • Martina Lawless
  • Zuzanna Studnicka

Abstract

This paper revisits the work of Fitzsimons, Hogan, and Neary (1999) on the level of trade between Ireland and Northern Ireland. In doing so, we reflect on the recent move to prominence of this issue since the referendum decision of the UK to leave the EU and also on the shift within the economics literature to looking at trade issues from a micro rather than a macro perspective as data availability has grown. Our country-level results show the same pattern of limited statistical significance for a border effect as was found in the earlier work still holds but when using firm-level data we find a positive and significant border effect. This effect holds for total trade at firm and product level with the primary determinant coming from the intensive margin, both in terms of average exports per firm and average exports per product within firms.

Suggested Citation

  • Peter Neary & Martina Lawless & Zuzanna Studnicka, 2019. "South-North Trade in Ireland: Gravity and Firms from the Good Friday Agreement to Brexit," Economics Series Working Papers 887, University of Oxford, Department of Economics.
    • Handle: RePEc:oxf:wpaper:887
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    References listed on IDEAS

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    1. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-1721, September.
    2. Bricongne, Jean-Charles & Fontagné, Lionel & Gaulier, Guillaume & Taglioni, Daria & Vicard, Vincent, 2012. "Firms and the global crisis: French exports in the turmoil," Journal of International Economics, Elsevier, vol. 87(1), pages 134-146.
    3. Frances Ruane & Ali Ugur, 2005. "Labour Productivity and Foreign Direct Investment in Irish Manufacturing Industry - A Decomposition Analysis," The Economic and Social Review, Economic and Social Studies, vol. 36(1), pages 19-43.
    4. 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.
    5. Matthieu Crozet & Pamina Koenig, 2010. "Structural gravity equations with intensive and extensive margins," Canadian Journal of Economics, Canadian Economics Association, vol. 43(1), pages 41-62, February.
    6. repec:spo:wpmain:info:hdl:2441/10147 is not listed on IDEAS
    7. Emla Fitzsimons & Vincent Hogan & J. Peter Neary, 1999. "Explaining the Volume of North-South Trade in Ireland - A Gravity Model Approach," The Economic and Social Review, Economic and Social Studies, vol. 30(4), pages 381-401.
    8. Gopinath, G. & Helpman, . & Rogoff, K. (ed.), 2014. "Handbook of International Economics," Handbook of International Economics, Elsevier, edition 1, volume 4, number 4.
    9. Martina Lawless, 2010. "Deconstructing gravity: trade costs and extensive and intensive margins," Canadian Journal of Economics, Canadian Economics Association, vol. 43(4), pages 1149-1172, November.
    10. 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.
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    12. Thierry Mayer & Gianmarco Ottaviano, 2008. "The Happy Few: The Internationalisation of European Firms," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 43(3), pages 135-148, May.
    13. Emla Fitzsimons & Vincent (Vincent Peter) Hogan & J. Peter Neary, 1999. "Explaining the volume of north south trade : a gravity model approach," Open Access publications 10197/48, School of Economics, University College Dublin.
    14. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    15. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-116, March.
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    Cited by:

    1. Cormac Ó Gráda & Kevin Hjortshøj O'Rourke, 2022. "The Irish economy during the century after partition," Economic History Review, Economic History Society, vol. 75(2), pages 336-370, May.
    2. Rodolfo G. Campos & Benedikt Heid & Jacopo Timini, 2024. "The Economic Consequences of Geopolitical Fragmentation: Evidence from the Cold War," CESifo Working Paper Series 11057, CESifo.
    3. Fernihough, Alan, 2024. "Economic Geography and the Irish Border: A Market Access Approach," QBS Working Paper Series 2024/02, Queen's University Belfast, Queen's Business School.

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    • F10 - International Economics - - Trade - - - General

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