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Firm networks, borders, and regional economic integration

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  • W. Mark Brown
  • Afshan Dar‐Brodeur
  • Jesse Tweedle

Abstract

Borders reduce interprovincial trade relative to intraprovincial trade. Using trade and firm ownership microdata over a 9‐year period (2004–2012), we show firm ownership networks, like trade flows, diminish with distance and borders and that the estimated effect of provincial borders on trade may fall by almost 75% after accounting for firm networks. This suggests the weaker presence of firm networks across borders has a significant, although statistically imprecise, effect on interprovincial trade. These findings reinforce the view that understanding border effects require not only the identification of barriers to trade but also barriers to investment across borders.

Suggested Citation

  • W. Mark Brown & Afshan Dar‐Brodeur & Jesse Tweedle, 2020. "Firm networks, borders, and regional economic integration," Journal of Regional Science, Wiley Blackwell, vol. 60(2), pages 374-395, March.
    • Handle: RePEc:bla:jregsc:v:60:y:2020:i:2:p:374-395
    DOI: 10.1111/jors.12456
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    Cited by:

    1. Xianwang Lv & Yingming Zhu & Jiazhen Du, 2024. "Can Regional Integration Policies Enhance the Win–Win Situation of Economic Growth and Environmental Protection? New Evidence for Achieving Carbon Neutrality Goals," Sustainability, MDPI, vol. 16(4), pages 1-22, February.
    2. Tang, Chenghui & Qiu, Peng & Dou, Jianmin, 2022. "The impact of borders and distance on knowledge spillovers — Evidence from cross-regional scientific and technological collaboration," Technology in Society, Elsevier, vol. 70(C).
    3. Elias G. Carayannis & Luca Dezi & Gianluca Gregori & Ernesto Calo, 2022. "Smart Environments and Techno-centric and Human-Centric Innovations for Industry and Society 5.0: A Quintuple Helix Innovation System View Towards Smart, Sustainable, and Inclusive Solutions," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(2), pages 926-955, June.

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