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How Much Does Geography Deflect Services Trade?

Author

Listed:
  • Anderson, James

    () (Department of Economics, Boston College)

  • Milot, Catherine

    (Department of Foreign A airs and International Trade Canada)

  • Yotov, Yoto

    () (Department of Economics & International Business LeBow College of Business Drexel University)

Abstract

We estimate geographic barriers to trade in nine service categories for Canada's provinces from 1997 to 2007 with novel high quality bilateral provincial trade data. The border directly reduces average provincial trade with the US relative to interprovincial trade to 2.4% of its borderless level. Third party effects acting through multilateral resistance combine with direct effects to reduce foreign relative to interprovincial trade to 0.1% of its frictionless potential. The downward deflection of international services trade is some 7 times smaller than the deflection of international goods trade. Surprisingly, intraprovincial trade in services and goods is equally deflected upward.

Suggested Citation

  • Anderson, James & Milot, Catherine & Yotov, Yoto, 2012. "How Much Does Geography Deflect Services Trade?," School of Economics Working Paper Series 2012-5, LeBow College of Business, Drexel University.
  • Handle: RePEc:ris:drxlwp:2012_005
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    Citations

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    Cited by:

    1. James E. Anderson & Mario Larch & Yoto V. Yotov, 2015. "Growth and Trade with Frictions: A Structural Estimation Framework," CESifo Working Paper Series 5446, CESifo Group Munich.
    2. Delina E. Agnosteva & James E. Anderson & Yoto V. Yotov, 2014. "Intra-national Trade Costs: Measurement and Aggregation," NBER Working Papers 19872, National Bureau of Economic Research, Inc.
    3. Prehn, Sören & Brümmer, Bernhard & Glauben, Thomas, 2012. "Structural gravity estimation & agriculture," DARE Discussion Papers 1209, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).
    4. repec:kap:iaecre:v:23:y:2017:i:4:d:10.1007_s11294-017-9663-7 is not listed on IDEAS
    5. repec:eee:jeeman:v:88:y:2018:i:c:p:95-113 is not listed on IDEAS
    6. Holladay, J. Scott & Mohsin, Mohammed & Pradhan, Shreekar, 2018. "Emissions leakage, environmental policy and trade frictions," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 95-113.

    More about this item

    Keywords

    Gravity; home bias; border effects; services trade;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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