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Going the Distance: Estimating the Effect of Provincial Borders on Trade when Geography Matters

Author

Listed:
  • Tweedle, Jesse
  • Brown, Mark
  • Bemrose, Robby

Abstract

For many goods, such as dairy products and alcoholic beverages, the presence of substantial (non-tariff) barriers to provincial trade is widely recognized. If these non-tariff barriers matter, intraprovincial trade should be stronger than interprovincial trade, all else being equal. However, comparing intraprovincial and interprovincial trade levels is challenging, because intraprovincial trade is heavily skewed toward short-distance flows. When these are not properly taken into account by gravity-based trade models, intraprovincial trade levels—provincial border effects—tend to be overestimated.

Suggested Citation

  • Tweedle, Jesse & Brown, Mark & Bemrose, Robby, 2017. "Going the Distance: Estimating the Effect of Provincial Borders on Trade when Geography Matters," Analytical Studies Branch Research Paper Series 2017394e, Statistics Canada, Analytical Studies Branch.
    • Handle: RePEc:stc:stcp3e:2017394e
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    File URL: https://www150.statcan.gc.ca/n1/en/catalogue/11F0019M2017394
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    Citations

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    Cited by:

    1. Agnosteva, Delina E. & Anderson, James E. & Yotov, Yoto V., 2019. "Intra-national trade costs: Assaying regional frictions," European Economic Review, Elsevier, vol. 112(C), pages 32-50.
    2. Mr. Jorge A Alvarez & Mr. Ivo Krznar & Trevor Tombe, 2019. "Internal Trade in Canada: Case for Liberalization," IMF Working Papers 2019/158, International Monetary Fund.
    3. Moshiri, Saeed & Bakhshi Moghaddam, Mohsen, 2018. "The effects of oil price shocks in a federation; The case of interregional trade and labour migration," Energy Economics, Elsevier, vol. 75(C), pages 206-221.
    4. Sigbjørn Sødal, 2017. "A Gravity Approach to Constructing Regional Structures from Interregional Flow Data," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 23(4), pages 361-377, November.
    5. Jared Carlberg, 2021. "Interprovincial Trade Barriers in Canada: Options for Moving Forward," SPP Briefing Papers, The School of Public Policy, University of Calgary, vol. 14(23), October.

    More about this item

    Keywords

    Domestic trade;

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