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Border effects and border regions: Lessons from the German unification

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  • Nitsch, Volker

Abstract

This paper examines data on trade flows between West German Bundesländer (federal states) and East Germany to explore the effect of national borders on trade. Although the data cover only a small fraction of intra-German trade flows, I find a home bias of about factor 2.2; West German shipments to East Germany are about 120% larger than deliveries to an otherwise similar foreign country. Based on this result, possible implications for border regions are discussed

Suggested Citation

  • Nitsch, Volker, 2002. "Border effects and border regions: Lessons from the German unification," HWWA Discussion Papers 203, Hamburg Institute of International Economics (HWWA).
  • Handle: RePEc:zbw:hwwadp:26291
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    File URL: https://www.econstor.eu/bitstream/10419/19364/1/203.pdf
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    References listed on IDEAS

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    1. Jan Fidrmuc & Jarko Fidrmuc, 2003. "Disintegration and Trade," Review of International Economics, Wiley Blackwell, vol. 11(5), pages 811-829, November.
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    5. John F. Helliwell, 1996. "Do National Borders Matter for Quebec's Trade?," Canadian Journal of Economics, Canadian Economics Association, vol. 29(3), pages 507-522, August.
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    7. Michael Anderson & Stephen Smith, 1999. "Canadian Provinces in World Trade: Engagement and Detachment," Canadian Journal of Economics, Canadian Economics Association, vol. 32(1), pages 22-38, February.
    8. 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.
    9. James E. Anderson & Eric van Wincoop, 2001. "Borders, Trade and Welfare," Boston College Working Papers in Economics 508, Boston College Department of Economics.
    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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    Citations

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    Cited by:

    1. Matthias Helble, 2007. "Border Effect Estimates for France and Germany Combining International Trade and Intranational Transport Flows," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(3), pages 433-463, October.
    2. Marie Daumal & Soledad Zignago, 2010. "Measure and determinants of border effects of Brazilian states," Papers in Regional Science, Wiley Blackwell, vol. 89(4), pages 735-758, November.
    3. Nuria Gallego & Carlos Llano, 2014. "The Border Effect and the Nonlinear Relationship between Trade and Distance," Review of International Economics, Wiley Blackwell, vol. 22(5), pages 1016-1048, November.
    4. Combes, Pierre-Philippe & Lafourcade, Miren & Mayer, Thierry, 2003. "Can Business and Social Networks Explain the Border Effect Puzzle?," CEPR Discussion Papers 3750, C.E.P.R. Discussion Papers.
    5. Francisco Requena & Carlos Llano, 2010. "The border effects in Spain: an industry-level analysis," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 37(4), pages 455-476, November.
    6. Olivier Lamotte, 2003. "Disintegration and trade in South-eastern Europe," Cahiers de la Maison des Sciences Economiques j04031, Université Panthéon-Sorbonne (Paris 1).
    7. Dimitris Kallioras & George Petrakos & Georgios Fotopoulos, 2005. "Economic integration, regional structural change and cohesion in the EU new member-states," ERSA conference papers ersa05p383, European Regional Science Association.

    More about this item

    Keywords

    home bias; intranational trade; gravity regression; unification;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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