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Measuring internal trade distances: a new method applied to estimate provincial border effects in Canada

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Author Info
John F. Helliwell
Geneviève Verdier

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Abstract

In this paper we suggest an improved methodology for comparing the intensity of trade across and within national and provincial boundaries. Earlier efforts to assess border effects for provinces or for countries without internal trade statistics made fairly arbitrary assumptions about average distances for internal trade flows. We improve on earlier efforts by taking more complete account of the distribution of population within each province or country. Internal distance is estimated as a population-weighted average of intra-city and intercity distances as well as distances to and within rural areas. We find higher estimates of internal distances, and hence border effects, than found in previous studies.

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File URL: http://economics.ca/cgi/xms?jab=v34n4/10.pdf
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Publisher Info
Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 34 (2001)
Issue (Month): 4 (November)
Pages: 1024-1041
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Handle: RePEc:cje:issued:v:34:y:2001:i:4:p:1024-1041

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  1. Yuriy Gorodnichenko & Linda Tesar, 2005. "A Re-Examination of the Border Effect," NBER Working Papers 11706, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Nicolas Péridy, 2007. "Trade Prospects of the New EU Neighborhood Policy: Evidence from Hausman and Taylor's Models," Global Economy Journal, International Trade and Finance Association, vol. 5(1), pages 7. [Downloadable!]
  3. 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. [Downloadable!]
    Other versions:
  4. Pierre-Philippe Combes & Miren Lafourcade & Thierry Mayer, 2003. "Can Business and Social Networks Explain the Border Effect Puzzle?," Working Papers 2003-02, CEPII research center. [Downloadable!]
    Other versions:
  5. Kristian Behrens & Cem Ertur & Wilfried Koch, 2007. "Dual' gravity: Using spatial econometrics to control for multilateral resistance," CIRJE F-Series CIRJE-F-501, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
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  6. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," NBER Working Papers 10480, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  7. Carolyn L. Evans, 2001. "Home bias in trade: location or foreign-ness?," Staff Reports 128, Federal Reserve Bank of New York. [Downloadable!]
  8. Russell Hillberry & David Hummels, 2002. "Intra-national Home Bias: Some Explanations," NBER Working Papers 9022, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  9. Nitsch, Volker, 2002. "Border Effects and Border Regions: Lessons from the German Unification," Discussion Paper Series 26291, Hamburg Institute of International Economics. [Downloadable!]
  10. Yener Kandogan, 2006. "Falling Walls and Lifting Curtains: Analysis of Border Effects in Transition Countries," William Davidson Institute Working Papers Series 821, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  11. Laura Bottazzi & Marco Da Rin & Thomas Hellmann, 2007. "The Importance of Trust for Investment: Evidence from Venture Capital," Working Papers 325, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University. [Downloadable!]
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  12. Arjan Lejour & J.W. de Paiva Verheijden, 2004. "Services trade within Canada and the European Union. What do they have in common?," CPB Discussion Papers 42, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  13. Maarten Bosker & Harry Garretsen, 2007. "Trade Costs, Market Access and Economic Geography: Why the Empirical Specification of Trade Costs Matters," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  14. Kei-Mu Yi, 2008. "Can multi-stage production explain the home bias in trade?," Working Papers 08-12, Federal Reserve Bank of Philadelphia. [Downloadable!]
  15. Carolyn L. Evans, 2001. "Border effects and the availability of domestic products abroad," Staff Reports 127, Federal Reserve Bank of New York. [Downloadable!]
  16. Nuno Crespo & Maria Paula Fontoura, 2009. "Determinant factors of structural similarity at the regional level: evidence from Portugal," Working Papers 2009/28, Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon.. [Downloadable!]
  17. Carolyn L. Evans, 2003. "The Economic Significance of National Border Effects," American Economic Review, American Economic Association, vol. 93(4), pages 1291-1312, September. [Downloadable!]
  18. Kei-Mu Yi, 2005. "Vertical specialization and the border effect puzzle," Working Papers 05-24, Federal Reserve Bank of Philadelphia. [Downloadable!]
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